The housing market won't begin to stabilize for at least two more years, the executive in charge of consumer and home equity lending initiatives at Lender Processing Services said at an industry conference in Orlando. But it could be two years or more after that for the market to return to "normal."
The reason for Shelley Leonard's pessimism is foreclosures. There are simply so many distressed properties and it will take until mid to late 2013 for them to clear, she said at CBA Live 2011. And that's just to get to 2009 levels, she added. "To get back to prior to that, we're talking much longer – 2015 or 2016."
Mark Greene, chief executive officer at FICO, wasn't any more optimistic. At the rate foreclosures are currently being sold, he said it will be 50 months "before the problem goes away, and that's assuming there are no more foreclosures" from here on out.
The two industry leaders made their remarks at a fast-paced opening session – appropriately titled a "rapid fire panel" – at the conference sponsored by the Consumer Bankers Association, which merged eight different conferences into a three-day event. The meeting contains several tracks, but the largest concentration of attendees are involved in home equity lending.
Referring to the meeting's Disney World location at the Hyatt Regency Grand Cypress Hotel, CBA President Richard Hunt, who moderated the wham-bang panel, said "No ride has been as exhilarating as ours, not even the Tower of Terror," the fearsome attraction that drops riders toward the ground from a height of 100 feet.
At another point, Hunt also exhorted his members to move forward carefully. "We cannot afford to be the next Blockbuster Video," he said.
