While no one knows for certain how many distressed properties lenders have yet to foreclose on, indications are that there’s a lot more yet to come. But area Realtors say demand for them is so strong that they’re not concerned.
One strong sign is the record levels of lis pendens, or cases still pending in the courts, said Kenneth H. Johnson, an associate professor in the College of Business Administration’s Department of Finance and Real Estate at Florida International University and editor of the Journal of Housing Research.
If all were to come to market at once, he said, prices would plunge. But the likelihood of that happening is slim.
“Banks are in no mood to mark the losses to their books,” Dr. Johnson said.
The problem is that current foreclosure laws, which require a timely response on the part of the lender to mitigate the loss to the original borrower, were written with the assumption that foreclosures happen one or two at a time, he said. “They don’t deal with the potential of massive amounts of foreclosures that could actually impact market pricing. Thus, current foreclosure law is at odds with the current situation.
Read : “Demand for distressed residences seen absorbing any to come” by Miami Today