The shadow has a few strong forces at work. The govt is now allowing the private sector to utilize it’s accounting style to appear solvent.
The lenders do not want to be forced to recognize true market value on their books and processing foreclosures would do this. So the really screwed ones are not even issuing NOD’s after many months of non payment.
Then the moratoriums are keeping any of them from processing foreclosures.
Then there’s the actual work load to process the bad loans as well as the logic that by flooding the market, they would destory the price.
CA currently has 9% of all mortgages at some level of deliquency and over 20% are underwater. Real unemployment/underemployment is in the 20% range and worsening.
Given that this seems to be the way things are evolving, we should have consistant negative pressure on house prices for some to time to come.
