Short sales and foreclosures will eventually accomplish that. Now if banks want to help - bring on the principal reductions.
From article in Bloomberg:
The policy over the past 30 years of giving the big banks pretty much what their executives want has proved to be an unmitigated disaster. Itâ€™s time to change that in a fair and reasonable manner. Let every disputed mortgage case be examined separately, using the full process of the law. If that prospect is too daunting for the banks accused of serious misconduct, then they should reach a settlement thatâ€™s big enough to make a difference.
|||||||||Simon Johnson, who served as chief economist at the International Monetary Fund in 2007 and 2008, and is now a professor at the Massachusetts Institute of Technology and a senior fellow at the Peterson Institute for International Economics, is a Bloomberg View columnist. The opinions expressed are his own.
Some updates that will affect inventory - The Street is reporting:
The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors -- vulture funds.
These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value.
Bloomberg is reporting:
An increase in short sales, along with a shorter average time to sell such homes and bigger discounts relative to normal deals, indicate the market is clearing distressed properties more efficiently, Chief Executive Officer James J. Saccacio said in the statement. Total pre-foreclosure deals rose 19 percent from the first quarter, while slipping 12 percent from a year earlier, when a federal tax credit pumped up demand.