This is rampant in the banking industry and when these "bad" loans come home to roost, disaster will strike. When these mortgage defaults hit, banks will be falling like dominoes. There will be no stopping this one.
From Agora: “I was confused,” a reader writes, “by the two data points with which you began yesterday's newsletter. You noted that there were over a 1,000 homes repossessed this past December and then immediately went on to note that there were over 2.8 million US foreclosures last year -- obviously, about 233,333 per month on average.
“Does this imply banks are foreclosing, but hardly ever repossessing or is there some potential data incongruity here (or just some obvious point I am missing)?”
The 5: There’s a whole lot of that going on. This is the “shadow inventory” phenomenon we documented last week courtesy of Dr. Housing Bubble, one of the few people attempting to quantify it. His work focuses on California, but there’s anecdotal evidence from all over that people are living in their homes for well over a year after getting a notice of default.
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