Quote of the day: Foreclosure Revelations

In the best case scenario, the issues are simply technical, the situation is resolved and the foreclosure process continues. Many believe housing won’t recover until the glut of foreclosed homes clears the market.

In the medium-case scenario, litigation ensues and the matter takes years to sort out. That will inflict more pain onto the already troubled housing market.

In the worst case, the issues become a “systemic problem” that grinds the mortgage market to a halt and title insurers refuse to insure mortgages involving existing homes. In other words, housing Armageddon.

– Three potential outcomes for the “Foreclosures Gone Wild” scandal, as suggested by Georgetown associate law professor Adam Levitin during a Tuesday conference call with Josh Levin, a Citi home-builder analyst. The Wall Street Journal has more.

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