'Lender delays in processing home- loan defaults will push as many as 1 million U.S. foreclosure filings from this year to 2012 or beyond, casting an “ominous shadow” on the housing market'

from bloomberg.......

"The number of properties receiving a notice of default, auction or repossession plunged 29 percent in the first half of 2011 from the same period last year, the Irvine, California- based data seller said today in a report. About 1.17 million homes got a filing, or one out of every 111 households.

Procedural delays caused by a probe into bank documentation errors, combined with weak consumer sentiment and a jobless rate above 9 percent, are weighing on a property recovery by adding to a backlog of distressed homes, RealtyTrac said. A clogged foreclosure pipeline may prevent real estate prices from finding a bottom as the housing slump enters its sixth year.

“If you accept the premise that foreclosures are the black cloud hanging over the market, we’re not going to get price stability and people won’t leave the sidelines until that cloud is cleared away,” Nicolas Retsinas, professor of real estate at Harvard Business School in Cambridge,Massachusetts, said in a telephone interview.

U.S. home prices fell 33 percent from a July 2006 peak through April, according to the S&P/Case-Shiller index of 20 cities. Federal Reserve Chairman Ben S. Bernanke said in testimony to Congress yesterday that ongoing weakness in home values is reducing household wealth and limiting consumer confidence.

3.2 Million Forecast

RealtyTrac in January forecast as many as 3.2 million foreclosure filings for 2011. Delays have persisted as state attorneys general investigate “robo-signing,” the practice of pushing through documents without verifying their accuracy. Total filings for the year are likely to be about 2 million at the current pace, compared with 2.9 million in all of 2010, Rick Sharga, senior vice president, said in a phone interview.

“This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number,” James J. Saccacio, RealtyTrac’s chief executive officer, said in today’s report"...........READ MORE