"When banks pulled back on foreclosures two years ago following a government investigation into allegations of faulty practices, market researchers, academics and Wall Street analysts said that a surge of delinquent homes would deluge the U.S. market once lenders resolved the claims and worked through backlog, driving down prices for years to come. RealtyTrac Inc., a seller of property data, warned a year ago of a “new set of incoming foreclosure waves.” Susan Wachter, professor at the University of Pennsylvania’s Wharton School, said in February that a logjam may be “unleashed” and destabilize the market.
the flood failed to materialize, even after the five biggest U.S.
mortgage servicers reached a $25 billion settlement with federal and
state regulators in February. Instead, the number of properties for sale
shrank to the fewest in a decade, prices appreciated at the fastest
pace since 2005, and the gradual healing of the housing market helped
boost consumer confidence and the economy."