Thread: 2010: The Next Mortgage Foreclosure Wave

Here is an article on the the "third wave." Apparently, we are in the middle of the 3rd wave of foreclosures.

This article discusses that those with good credit are now foreclosing on their homes because of job losses. (Note, that the Alt-A and Option Arms mortgages will reset next year, meaning a big spike in foreclosures next year in 2010.)

By PETER S. GOODMAN and JACK HEALY
Published: May 24, 2009

As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.

In the latest phase of the nation’s real estate disaster, the locus of trouble has shifted from subprime loans — those extended to home buyers with troubled credit — to the far more numerous prime loans issued to those with decent financial histories.

With many economists anticipating that the unemployment rate will rise into the double digits from its current 8.9 percent, foreclosures are expected to accelerate. That could exacerbate bank losses, adding pressure to the financial system and the broader economy.

“We’re about to have a big problem,” said Morris A. Davis, a real estate expert at the University of Wisconsin. “Foreclosures were bad last year? It’s going to get worse.”

Economists refer to the current surge of foreclosures as the third wave, distinct from the initial spike when speculators gave up property because of plunging real estate prices, and the secondary shock, when borrowers’ introductory interest rates expired and were reset higher.

“We’re right in the middle of this third wave, and it’s intensifying,” said Mark Zandi, chief economist at Moody’s Economy.com. “That loss of jobs and loss of overtime hours and being forced from a full-time to part-time job is resulting in defaults. They’re coast to coast.”

Link & Entire: http://www.nytimes.com/2009/05/25/bu...e.html?_r=1&hp

Originally Posted by danzik17

I should clarify: the areas of CT that I'm willing to live in are too expensive.

I COULD buy a house if I was willing to move to Bridgeport, but I am not willing to live in a crime ridden city just to own a house.

This is the same. Exorbitant housing. Yes, you can afford to buy, in a crime-ridden area. Awful.

It's sick, 1BR Condos cost as much or more than a 3BR/2BA 2 car garage does in North Carolina. Just one of the many reasons I want to move down there some day.

It's nice.