FORECLOSURES TO CLIMB BEFORE BANK DEAL HELPS HOUSING MARKET

Thursday’s $25 billion settlement with banks over foreclosure  abuses may result in a wave of home seizures, inflicting short-term  pain on delinquent borrowers while making a long-term housing recovery more likely.  Lenders slowed the pace of foreclosures as they negotiated with attorneys general in all 50 states for more than a year over allegations of faulty and fraudulent paperwork used to repossess homes.  Banks are likely to resume property seizures after the settlement, which will direct $17 billion to writing down debt to buffer about 1 million homeowners  from foreclosure through mortgage forgiveness, forbearance or loan modification programs.

Bloomberg News  February 10, 2012