Expert sees ‘years’ of 1 million-plus foreclosures

Rick Sharga, who helped to build RealtyTrac into the nation’s preeminent network for tracking foreclosures, said the housing market faces several more years of approximately one million new foreclosures per year.

Sharga, now executive vice president with Carrington Mortgage Services, told Housing Wire that he doesn’t see a spike, rather a slow, steady burn in order to spare home prices from further reductions.

“I think it’s less likely that we’re going to see a ‘peak’ year in REO sales that looks dramatically different than what we’ve been seeing over the past few years,” Sharga said. “This is partly due to relatively weak demand, partly due to what I’d call ‘inventory control’ being executed by the lenders and servicers, and partly due to the fact that foreclosure processing, evictions and redemption periods have all become extended, and often appear to be in a state of flux.”

According to Lender Processing Services mortgages, facing foreclosure are delinquent an average of 611 days. Once a foreclosure is initiated, Sharga said it can take as long as 400 days to complete.

Recently, analysts at Bank of America Merrill Lynch estimated REO sales would peak until 2013 when nearly 1.5 million properties would be sold.