The Foreclosure Wave That Wasn't

Loan relief and private equity purchases dampened dire predictions for 2012
“People see a foreclosed home for sale in this area and they’re going to jump on it,” says a California realtor Photo illustration by Alis Atwell; Photographs by Alamy (3); Getty Images (27)

When banks pulled back on foreclosures two years ago following a government investigation into faulty paperwork by lenders, Wall Street analysts, academics, and researchers thought the lull would be followed by a storm. They believed that once banks resolved the claims of delinquent homeowners piling up in courts and worked through their backlog of foreclosures, tens of thousands of houses would hit the market, driving down prices for years to come.

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