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Lenders Hesitating to Repossess California Homes

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SHADOW ECONOMY
Sounds relatively good, right? Perhaps homeowners who are behind on their mortgages are getting a bit of a break in terms of a time extension. Unfortunately, the reality speaks to a different story. The problem is lenders are increasingly reluctant to take repossess these properties, this creating a "shadow inventory" of supply that is understated by reported housing supply figures. Moreover, consider what Capital One reported recently about cardholders who are falling behind on their accounts; they're increasingly not even trying to get current. If a similar mindset is occurring among California homeowners, and with prices continuing to decline our bet is it is, a new wave of problems are on the horizon.
SOURCE:   L.A. Times

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