Commercial

The Coming Foreclosure and Commercial Real Estate Storms

(CBS NEWS) - When you read that foreclosure filings fell 10% in January from December, don’t get too excited. According to Realty Trac, foreclosures are 15% higher than they were a year ago and there’s likely to be an increase in foreclosure activity in the next few months, as the government’s crappy mortgage modification program continues to fail.

James J. Saccacio, CEO of RealtyTrac noted that “if history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works.” In other words, another storm is a-brewing in the housing market.

The continued reluctance of banks to tackle the foreclosure problem is astounding. There’s near-universal agreement that principal reduction is the key, but we are left with lame programs, like this one announced yesterday by CitiMortgage. The so-called “strategic non-foreclosure” continues the “extend and pretend” policy that bank lenders have pursued over the past year.

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