Foreclosures Fall, and Why That's Bad News

Bad news: The number of foreclosure actions taken by banks fell in January compared to the year before, according to the researchers at RealtyTrac. Foreclosures fall: bad news.

Yes, you read that right. Banks seized fewer homes in January, and that's bad news for everyone. Here's how Rick Sharga, senior vice president with RealtyTrac, explains it:

"With the number of foreclosures falling, you would figure the housing market is on its way to recovery," said Sharga. "That's not the case. The number is artificially low... and that could extend the housing market's downturn."

What's going on? The answer to this riddle gets to the heart of what's wrong with the housing markets.