A vital sign of the economy’s improvement will be a significant reduction in foreclosures. And the place where industry watchers turn every month to track that metric is RealtyTrac, the online real estate marketplace, whose U.S. Foreclosure Market Report has become a key bellwether of the housing industry’s fortunes during the recession.
As its vice president of marketing, Rick Sharga is RealtyTrac’s public persona, explaining its data to the media and government officials. Sharga has been with the company since 2004 and spent the previous two decades developing marketing strategies for the likes of DuPont, JD Edwards, and Honeywell.
Builder interviewed Sharga in mid-June, a few days after RealtyTrac reported that foreclosure activity in May was up 18 percent from a year ago.
Q: Why haven’t state-imposed moratoria or prevention plans stemmed foreclosures?
A: Most states’ actions have simply delayed the process but haven’t done anything to affect foreclosures themselves. What lenders could do is defer or forgive principal balances, particularly in the hardest-hit states. But I see no indication that lenders are willing to do that.
Q: Who or what do you think bears the greatest blame for this crisis?
A: When CSI detectives get around to examining the body, they’re going to find Wall Street’s fingerprints all over it. But the cause [of death] will be greed, and that’s where consumers have to take some of the blame.
Q: What will be the aftermath of the foreclosure debacle?
A: On the positive side, we’ll see a return to fundamentals in lending. We’ll also see more regulation, maybe more than we need. If I were a betting man, I’d wager that tax credits will be extended and expanded, and FHA loan limits will be raised. On the negative side, it’s going to be harder for the average person to get a loan for a while. And it’s a bad time to be a builder, when you consider there are probably 500,000 bank-owned properties that haven’t come back on the market yet.
