The latest reminder of just how vast this whole foreclosure mess could be: Thirty-one percent of all the homes sold in September were in some stage of the foreclosure process, according to figures out this morning from RealtyTrac.
That suggests banks' current halt on selling homes in foreclosure is likely to have a big impact on overall home sales this month.
What's more, most of the homes that have been in foreclosure will likely be foreclosed on eventually, once the banks sort through all of their sloppy paperwork. So the halt to foreclosures now will mean more foreclosures later.
Here's how RealtyTrac put it in a statement today:
...if the documentation issue cannot be quickly resolved and expands to more lenders we could see a chilling effect on the overall housing market as sales of pre-foreclosure and foreclosed properties, which account for nearly one-third of all sales, dry up and the shadow inventory of distressed properties grows — causing more uncertainty about home prices.
In other news from the foreclosure mess:
At JPMorgan Chase, the people hired to sign off on foreclosures were referred to as "Burger King kids," because of their lack of experience in banking, this morning's NYT reports. The story looks at the rushed, messy process banks have been using for foreclosures.
Attorneys general in all 50 states are now investigating the banks' foreclosure processes.
Note: GMAC Finance, one of the lenders at the center of the foreclosure mess, is owned by Ally, a Planet Money sponsor.