Allegedly, we are in a housing recovery. About as recovered as the house under the uprooted tree in the picture.
In reality, the mortgage debt that has disappeared has been discharged in bankruptcy cases, both Chapter 7, and Chapter 13 payment plan bankruptcies, in which second mortgage liens have been stripped completely.
And, other debt the mortgage companies have simply charged off, written off, and are not chasing to collect.
Now, I see the underbelly of the economy all the time, being a bankruptcy attorney. I know the mortgage companies are slow to foreclose. I have blogged about shadow inventory before, the homes the banks already foreclosed and own but have not put up for sale yet, because of the law of supply and demand.
The more houses up for sale, the lower the price will go. Being that mortgage companies own so damn many houses these days, they are interested in keeping, or getting, prices up.
Even I was surprised to learn how bad things really are.