According to this Foreclosures.com blog article, More on Stress Tests, due to 10 of 19 big banks needing to raise funds as a result of the “stress tests” the big banks, and other banks, will start selling shares and begin to dump their increasing pool of foreclosures very soon. Foreclosures (non-performing assets/real estate owned/REO’s) have been piling up since 70% are not showing up in MLS’s as being for sale. That means there is a large pool of foreclosed homes coming on the market soon. I discussed this “hidden foreclosure” problem in a previous blog post. Clearly, this dump of foreclosed homes is going to hurt the real estate market. I see no reason to believe that foreclosures will decline any time soon as the jobless rate hits 10% by the end of the year combined with the fact that too many homeowners have no savings to get them through a period of unemployment (see my previous blog post on this topic).
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