In a recent release by the analysts at Moody's Investors Service hypothesized that already depressed home prices could fall by an additional 20% if the U.S. economy slips back into recession. The Moody's research report stated, "the risk of a double dip recession is rising. We believe the odds of a near-term double dip recession have increased from nearly one in five this spring to closer to one in four."
The report warns that housing prices, expected to drop 5% before leveling off in early 2011, could fall by 20% before finally stabilizing in early 2012. Moody's analysts pin the hopes of preventing sliding home prices on the success of the Home Affordable Modification Program (HAMP). To date the HAMP program has not met the initial expectations of the Fed because many borrowers are too far behind for a mortgage modification to help. As we have detailed in our Florida Foreclosure Defense blog, the government has introduced several new revisions to HAMP, in an effort to make the program more beneficial for those homeowners.
