I don't know if this will have much impact. In the 2008 market crash, many properties sat on the sidelines for years before a nonperforming asset market built up. Now that it's an industry, banks can gather a bunch of foreclosed/nonperforming property notes and sell them to hedge funds. The funds will then take the big lumps and break them up into retail sizes for investors to buy.

Say you buy a nonperforming note. You can either take possession of the property and flip it, or you can renegotiate the mortgage with the owner, if they are still living there.

If it's the latter, then there are servicing companies that can take care of the work of taking payments, collecting escrow, and sending late payment notices. Since you don't own the property, you only hold the note, you don't need to worry about maintenance. You just get your payments by direct deposit.

This is all to say that there is now an established route for nonperforming assets to get written off and put back on the market rather than languish on the sidelines. Banks will not refinance a mortgage if you've missed payments. They'd rather sell the note at a discount. They often leave enough meat on the bone for investors to make money refinancing the property or to do owner finance after foreclosure.

In other words, I think any properties in trouble will have a swarm of experienced investors (from the 2008 crisis) able to take the inventory and put it back out on the market without depressing house prices.

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