“…a recent study tells us that 2.2 million homes will soon be lost to foreclosure.”
“Suddenly a mortgage that was worth hundreds of thousands of dollars in cash flow to the bank over its 30 year lifespan is gone. In its place the bank has a house it does not want…”
“…banks are the definition of ‘motivated sellers.’ As opposed to regular sellers who will wait to get “their price” before selling, banks will sell at just about any price to get the property off their books…”
“And thus begins the deflationary spiral. Credit is destroyed, jobs are lost, payments are missed, bankruptcies declared…”
Full article can be found here:
Links of note within that article:
Chicken Smith View:
Foreclosures are happening. Partly, if not primarily, the result of lending based on initial introductory rates on Adjustable Rate Mortgages. This, as anyone can see, is a recipe for disaster, as there is no guarantee that Joe-Six-Pack who can pay $2,000 per month on a loan today, will be able to pay $3,000 a month when his rate automatically adjusts. ARMs were not meant as a way to get individuals into homes they cannot afford, they were created in response to professional real estate investors needing a way to secure a mortgage while waiting for money from other investments to free up. Lenders’ recent lax qualification processes can be partially blamed for this, but it’s ultimately the borrower’s who are to blame for their lack of foresight as to how these loans would affect them down the road. The bottom line is that the banks’ greed resulted in their selling of a poor product on an unsuspecting public. So for the love of Pete, if you’re about to get a mortgage, don’t get an ARM! (see ARMed And Dangerous) No one can predict the future, so you certainly don’t want to bet the house on it!