If the boom in refinancings represents the green shoots of the housing market, the continued surge in foreclosures seems to be the desert wind that makes the bottom of the market hard to spot. First-quarter foreclosure filings hit a record 803,489, notes the National Short Sale Center; it expects such filings to exceed one million in the second quarter. The U.S. Senate is still considering legislation for foreclosure relief, without the claw-down provision contained in the version passed by the House. And the White House has announced new initiatives as part of its Making Home Affordable program that provide incentives for borrowers and services to “pursue short sales and deeds-in-lieu of foreclosure in cases where a borrower is eligible for a MHA modification but unable to complete the modification process.” On a sobering note, the Treasury Department says that “eligible borrowers will be accepted until December 31, 2012.”
The White House also added what it calls Home Price Decline Protection Incentives in a further effort to stabilize the housing market, which provide “payments based on recent declines in home prices to reduce the risk of loss to lenders from modifications compared to alternatives that could result in the loss of homeownership,” according to a fact sheet released by the Treasury.