Saw this on CNBC.com this morning:
Foreclosures are setting new records again, this time not in their overall numbers, but in the time it is taking for all of these properties to be processed through the legal system. The average loan in foreclosure has now been delinquent a record 631 days, according to a new report from Florida-based Lender Processing Services.
Further along in the article (bold mine)…
…we are now beginning to see the effects of ineffective loan modifications. Repeat foreclosures made up nearly 45 percent of new foreclosures in October. Of the 2.1 million modifications since the start of 2008 more than 10 percent were in foreclosure with another 27.4 percent delinquent 30 or more days, as of the end of the third quarter of this year, according to the Office of the Comptroller of the Currency.
This should not surprise any of us. I said a long time ago that these modifications were only going to stretch this crisis out. We should have allowed the market to take care of this mess for us. All the money and time spent modifying loans could have been used to give loans to qualified buyers to purchase foreclosure inventory. Instead, we directed money to help keep people in homes that they could not afford. It would be like me getting help on a loan for a $10 million mansion. As much as it hurts, we have to allow the housing market to capitulate. Prices drop enough, there will be buyers.