May 22, 2018

Sandy Delays Foreclosure 'Flood'

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Sandy Delays Foreclosure 'Flood'

Foreclosure moratoriums placed in hard hit by Hurricane Sandy may ultimately wind up prolonging the housing recovery and making the foreclosure problem even worse in these areas, CNNMoney reports.

Prior to the storm, hard-hit areas in New York, New Jersey, and Connecticut already had been seeing a 54 percent increase in foreclosures over last year. Nearly 125,000 homes were already in some stage of foreclosure or bank-owned by the end of October in the 34 counties now labeled disaster sites, RealtyTrac reports. 

Freddie Mac and Fannie Mae has told servicers to delay any actions against home owners who have defaulted on their mortgages in the disaster sites. 

"Moratoriums being put into effect as a result of the storm will likely extend the already lengthy time to foreclose in these states," Daren Blomquist, vice president of RealtyTrac, told CNNMoney.

Eventually, “all of those distressed properties will continue to weigh on home prices as the banks try to unload them in foreclosure auctions and sell them on the open market at a discount once the suspensions are lifted,” CNNMoney reports. More foreclosures will likely hit these regions too, as some storm victims may opt to walk away from their homes rather than rebuild, says Brad German, a spokesman for Freddie Mac. 

Source: “Foreclosure Mess Awaits States Hit by Superstorm Sandy,” CNNMoney (Nov. 16, 2012)