I need to thank my friend Dick Rosen (http://www.rosenprop.com/) and Dan Doran for help with this information.
If I have been in your living room in the past 3 years, this slide from Credit Suisse below is not news to you as I’ve shared this slide with everyone I can as often as I can. Last month we talked about Shadow Inventory and this month we’re again talking about the foreclosure boom that is about to hit. Three weeks ago I had the opportunity to meet with on of Harry Dent’s (The Great Depression Ahead) analysts in Orlando. He reminded me of that our near and present danger with regards to not only our aging demographics, but the looming threat of the Red Dragon coming up the path. More on this later; however, I seriously urge you to read the above referenced book by Dent.
Brace for impact - foreclosure crisis coming to a head soon. The next wave of foreclosures will include the ALT-A and Option Adjustable loans that were for the “good” borrowers. Now (fast forward 3-5 years) those “good” borrowers aren’t so good anymore and are just as likely to walk from a current loan to realize and capture a “great deal” right down the street or across town. The rational is, if I can buy a million dollar house for 650k, and my current 450k house is now worth 300k, it might make sense to trade up to capture this great buying opportunity. Websites like http://youwalkaway.com/ are helping borrowers navigate the waters of foreclosure.
Back to the topic of today….. More foreclosures on the horizon.
