Sorry about that. Someone sent me the article. Here is the meat of it:
Statistics compiled by data aggregator RealtyTrac hint at the magnitude of the problem nationwide. RealtyTrac tracked foreclosure-related filings on 2.3 million U.S. properties in 2008, an 87 percent jump from the year before, with 861,664 homes making it through the entire process to become REOs.
The Mortgage Bankers Association's surveys of members suggest one out of 10 mortgages was either delinquent or in the foreclosure process at the end of September, and Moody's Economy.com estimates 12 million homeowners are "upside down" -- they owe more on their homes than their properties would fetch in today's market.
RealtyTrac senior vice president Rick Sharga told attendees at the Inman News Real Estate Connect conference in New York City this month that an analysis of 500,000 distressed properties in four states in the company's database found only about one in four were listed for sale in a multiple listing service, or MLS.
That suggests that as many as 75 percent of distressed properties have yet to hit the market, Sharga said, and that many of those homes will soon be putting pressure on inventory and prices as banks repossess them and put them up for sale. . . .
Joshua Olshin, president of New York, N.Y.-based Tranzon Integrated Property Group, said that the possibility that a wave of REO properties is about to enter the market creates uncertainty and puts downward pressure on prices.
"People see the foreclosure numbers, and that banks are not even selling what they have, and then we have a whole new load (of REOs) coming on, and that's causing people not to price things effectively and accurately," Olshin said. "It's kind of compounding the problem, I think." . . .
The government's TARP purchases of preferred shares gave some banks a thicker capital cushion -- if only fleetingly -- which regulators hoped they would use to make more loans. Instead, some banks have moved to acquire weaker competitors.
"Last summer, we began seeing banks be much more aggressive in the way they priced things," Olshin said. But banks may also not want to recognize losses that accompany the sale of properties at deep discounts when they are having difficulty raising the capital they need to meet statutory minimums, Olshin said. "To be frank, since the TARP money came in, they are still selling off (properties at auction), but they kind of took a step back." . . .
Real Estate Disposition LLC (REDC), which claims to be the nation's largest real estate auction company, held 300 ballroom auctions in 2008 and sold nearly 33,000 foreclosed homes for $3.4 billion -- a seven-fold increase in sales volume and nearly triple the proceeds the company generated in 2007.
Company CEO Jeffrey Frieden said he expects to "smash that record" this year as banks and lenders continue to amass a huge inventory of foreclosed homes and are more motivated than ever to sell their inventory. . . .
Some observers fear that if the massive amount of debt the government is taking on to stimulate a recovery, inflation -- and higher interest rates -- are inevitable consequences. Inflation can spur home sales because households are looking for an inflation-proof place to park their assets.
But rising interest rates can also reduce consumer's home-buying power, undermining prices. If interest rates shoot up, buyers who close a deal on a home with a subsidized mortgage could see the value of their homes plummet when subsidies end and interest rates shoot up. . . .
"It's almost like a tsunami -- you can see it coming and you know it's going to hit but you cant get out of the way," said Ann Stickel, vice president of affiliated services with Sarasota, Fla.-based brokerage Michael Saunders and Co.
