Reality Trac had commented that 70% of current mortgage defaults are currently not listed in MLS, they are kept off the books because it would impact the economy which would cause catastrophe in the stock markets and our dollar. Up to 9 million homes may enter foreclosure over the 2009-2011 period, versus one million in a typical year. At roughly U.S. $50,000 per foreclosure according to a 2006 study by the Chicago Federal Reserve Bank, 9 million foreclosures represents $450 billion in losses according to the New York Times. The fact is - many people are under the belief that we are coming close to the end of the housing crash, but many sources say it has only just begun.
One of the main problems as you know are these adjustable rate mortgages that are pushing people out of their homes. I have noticed quite a bit of documentaries of people are loosing their homes from the simple fact that their mortgage has been shuffled around so much, the bank forgot to inform the homeowner who to make the payment to. Homeowners were making payments as per usual, unknowingly defaulting because of miscommunication.
Many of the sub market loans prey upon people who didn't read the fine print in these shaky loans. Brokerages pushed these loans because the loan officers received a bonus on some loans and not on others. I came across a video that documented a woman having a 7% loan that skyrocketed to 20%!! Yes that was her home loan, not her credit card. Another reason people are loosing their homes is because the majority of the public bought a home they couldn't realistically afford. Still, people opted for the bigger homes than one they could afford using the excuse that a simple sale down the road could get them out of the mess. The fact is right now, people are loosing their jobs as the economy is on a downward spiral, as medical problems become the norm, while their interest rates increase. Homeowners become stationary as they cannot sell as the market is flooded with foreclosures at low prices.
Any investor involved in real estate would advise to put extra consideration into your mortgage rate and application, ensuring that it doesn't contain outrageous and unfair loopholes. You can do this by increasing your FICO credit score in the reporting period of 6 months, as well as buying within your means.
Many documentaries have mentioned that *many* people have lost their homes through the home equity teaser loans that were widely advertised. The loans were so low, people rolled existing debt, bought vehicles, or improved their home with the easy money. These easy- home equity loans were adjustable, and as the rates increased, their payments were no longer affordable. A home that was paid off was put into jeopardy , and sadly was lost. People assume that times will always be great. Most people assume that we could never go through a "great depression like the 20's and 30's. It is very sad to see a couple who has slaved away to pay off their mortgage over the years, face financial difficulties due to a job loss, suddenly facing the reality of losing their home because their home equity line was secured by their home. The silly thing is, that if a person could get a home equity loan, they could have applied for a credit card, or some other loan that was not secure. The problem again is lack of research before making an important decision. I still feel that anyone who uses their home or car title as collateral for a loan is really really silly. Why would anyone gamble with their family home? There are so many loan offers out there if only some time is set aside to do the research. So if you have loans that are secured with your home as collateral, I would suggest you give that a second look.
This easy credit has caused a lot of problems, but it looks like we are far from over. With the decline of morals, and with easy money, many of these companies have acted immorally, and people all around the world have had their own shopping spree. I would hate to also add, that our country has unsustainable debt. China is no longer wanting to piggy back ride the USA anymore, adding an additional layer of insecurity. The New World Order's plans of a new currency will make the dollar even more useless than it already is causing most of the population to accept what ever rate they give the dollar. This country and many countries have far more problems that they are willing to admit. Don't assume we will have rosy times ahead. It is anything but. Some day it will come crashing down. There is just way to many examples that I can give where United States is going to fall to her knees.
I would highly recommend the two articles below:
The Greatest Scam of All Time by Martin D. Weiss, Ph.D.
Adding Up the Government’s Total Bailout Tab- New York Times
This is the EUR/USD chart. You can see how the dollar has really fallen over the last number of years. You can see that in 2001 the dollar really dropped in value compared to the EURO
As you can see 2010 and 2012 will be a bigger wave of foreclosed homes. I try not to think of the unemployment numbers for those years, which cannot be calculated in advance.
Where do you find Free Bank Owned properties?
-Countrywide, Bank of America, Chase Mortgage, and U S Bank list their foreclosures on their websites.
- MLS has a list of foreclosures in each town and city
-Asset Management Companies are hired to handle foreclosures on the lender's behalf. Some of these companies are Premiere Asset Services, HomeEq Servicing, Keystone Asset Management.
- Government agencies are also a great source for Foreclosured homes. Agencies such as HUD (Housing Urban Development), Fannie Mae, Department of the Treasury ( Homes seized by the Internal Revenue Service), SBA (Small Business Association)
- Auction Houses hold huge auctions selling as many as 100 homes or more in a single day. A few are - Real Estate Disposition Corporation, J. P. King, United Country Auction Services, Williams & Willaims,Bid4Assets
- Internet Foreclosure Companies, there are hundreds of internet based companies who charge an arm and a leg for the information. There are two that are among the best, Foreclosure.com , Realty Trac
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