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Efforts to Cut Down Number of Distressed Houses Continue

The housing market recovery is being buoyed by continuous increases in sales, particularly of cheap distressed houses for sale. However, it is not just sales that are feeding the recovery, but also efforts both by the U.S. government and the nation's big banks.

Distressed Real Estate

Recently, a host of programs have been introduced to help owners of distressed properties avoid foreclosure. Meanwhile, foreclosures that have already landed in the hands of banks and the government are getting sold to investors interested in entering the thriving rental market.

Settlement, Rentals and Other Methods

Efforts to provide aid to troubled homeowners picked up pace during the early part of the year when a $26 billion settlement with the nation's biggest banks was inked. The settlement will channel funds to the aid of homeowners facing foreclosure in the U.S. Although some deem the amount not enough, there is no denying that it is still better than nothing.

In the past week, Bank of America has also announced that it will start a program whereby homeowners facing potential foreclosure and were unable to secure loan modifications will be allowed to stay in their homes as renters. Aside from helping owners retain their properties, the effort is also meant to prevent further increases in empty foreclosed homes.

How will Homeowners Respond?

BofA admits that it is not sure how many troubled homeowners will accept this proposed arrangement. However, initial reactions to the proposed program have been mostly positive. Analysts believe that it will make a difference for homeowners who are having trouble paying their mortgage loans.

They also state that it will prevent further increases in foreclosure numbers, something that is possible in the coming months as lenders get through processing problems and start to unleash held-off properties into the market. Analysts further added that although the release of pent up foreclosures will mean some more pain for housing, it will only be for the short term.

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