If the national foreclosure crisis were a baseball game, we would be in about the top of the sixth. And we may have to go to extra innings.
Since the housing market peaked in 2006, some 6.5 million homes have been lost to foreclosure. There are likely another 4.3 million more homeowners who are “seriously delinquent,” meaning they are more than three months behind in their payments, according to data released by the Mortgage Bankers Association this week. Many of those homeowners will soon enter the foreclosure pipeline.
Though the pace of new foreclosures has fallen recently, that is largely the result of lenders choking on the torrent of paperwork created by the millions of foreclosures already in progress.
After lenders tried to speed the process and cut corners by “robo-signing” documents, bank regulators last month ordered them to clean up their act – saying those practices had jeopardized the “safety and soundness” of the banking system. Some 14 of the biggest mortgage lenders were ordered to come up with a plan to fix the problem within 60 days. When they do, analysts expect the pace of foreclosures to pick up again.