Housing experts fear another wave of foreclosures

10.23.09
By Timothy Greene

Despite considerable signs of progress in the national housing market, industry experts are becoming increasingly concerned that another wave of foreclosures could still be on the market.

A recent Wall Street Journal report examined housing data from 28 metropolitan areas and found that while fewer homes tend to be on the market, a number of cities can still expect banks to end up acquiring significant numbers of foreclosed properties. This would likely depress prices in the overall market by driving the available supply of properties back up.

The newspaper cited cities like Las Vegas, Atlanta, Detroit and several parts of Florida, including Miami, as being most at risk for this scenario, while other areas such as Boston, Denver, Seattle and Minneapolis were seen as less likely to experience such problems.

The Journal noted that much of the current situation is due to government efforts to hold off foreclosures, which in many cases are now winding down, bringing about what may have long been inevitable for some homeowners.

The looming problem has not gone unnoticed in some official quarters. A Reuters report noted that some officials are concerned that programs by the Obama Administration to help homeowners avoid foreclosure have had some disappointing results.

At issue, according to the wire service, is how many people have actually been able to receive significant adjustments to their mortgage loans. The article also noted that California Democratic Congresswoman Maxine Waters is pushing the Treasury to provide information based on each congressional district about how many of these loans have actually been modified.

Still, things may not be as bad as some fear. For example, a recent Los Angeles Times report says that lending institutions in California have become more willing to work with struggling homeowners because of concern about what a second wave of foreclosures could do to the overall housing market.

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Many experts are concerned about a possible second wave of foreclosures.