Bigger Crisis Looms After Obama's 3-Month Moratorium On Foreclosures
April 24, 2009 • 10:31AM

The Obama 3-month housing foreclosure moratorium ending March 31 failed to refinance anything like the 9 million mortgages targetted, while producing a record number of foreclosures in April, and a crash in home prices. According to RealtyTrac, 600,000 foreclosed homes have "disappeared" — the banks have taken them off the market to avoid more "fire sale" prices, which would take the banks down with them:

"Housing prices are not falling; they're crashing and crashing hard. Now that the foreclosure moratorium has ended, Notices of Default have spiked to an all-time high. These Notices will turn into foreclosures in 4-to-5 months time, creating another cascade of foreclosures. Market analysts predict there will be 5 million more foreclosures between now and 2011. Soaring unemployment and rising foreclosures ensure that hundreds of banks and financial institutions will be forced into bankruptcy," says the Global Research Center newsletter. More than 40% of delinquent homeowners have already walked away from their homes," reports the CRG e-newsletter.

RealtyTrac found 600,000 foreclosed homes which have disappeared from the listings, when it compared its database of bank-repossessed homes in four states, including California. It found that only 30% of the foreclosures were listed for sale in the Multiple Listing Service. If regulators were deployed to the banks that are keeping foreclosed homes off the market, they would probably find that the banks are actually servicing the mortgages on a monthly basis to conceal their losses, their sources say.