BiggerPockets

I would say, more accurately, the 3rd wave is the release of the bank moratoriums (REO will flood your market again), 4th wave for those hit by recession is probably another 3-4 months away. Either way, get your $$ ready to jump on it!! :-)

Originally posted by nationwidepi

I woudl say that many of these prime borrowers are going into foreclosure and walking away, not maily because they lost their jobs or income, but that their hom values are so upside down form their mortgages, it makes better sense to them to just walk.

In addition, I don't believe this to be the thrid wave either. The thrid wave is and will be the REO's finally allowed to be released into the market place due to the new chnages in marked to market (an accounting practice).

What I find interesting is that, at least locally, people think things are getting much better. "inventory is down and prices are creeping up, we must be out of the worst of it", etc. Little do they know, there are millions of REOs just being held behind the dam, waiting to be released. When the market is flooded again with REO, it will wash away their thin, frail hope that we are out of this unfortunately (even in Denver, which is slated to rise early out of the recession, etc). A good for us, bad for them mentality I have.

I am sure that the banks will do what is best for them and the CEO's and not for us or the economy, or the housing market! They can give two s*^@s about us.

As these REO's become your areas "comps" that will by necessity of averages lower the home prices!!!!!!!!

As those home prices continue to fall and become more "affordable" to the general public, there will be more pressure on the banks to fund those homes thus driving up the interest rates by the sheer laws of supply vs demand.

Therefore it can be said that we can see the light at the end of the tunnel, but when that light first becomes visible you still usually have a long way to crawl to get out into the open.

That tsunami factor (or the wave that comes in) will destroy anything that is not built upon a solid foundation. But the rocks and hills that are covered remain stable (they do get a good cleaning and sometimes get covered up) but they do not collapse like the structures built upon the sand the is easily moved by the wave.

Therefore knowing your market and watching the trends like your waterfront condo now being a mile inland from the water receeding is always the best advice. Sometimes those of us that know what we are doing forget these little things that have the ability to undermine us.

Knowing your market not only helps out the buy/holder but tells them where to buy/hold at different economic times.
Having riverfront property with the great mountain view might not be the best place to be when you hear the rumblings of that mountain volcano from which your river starts.

Jon

On tuesday I had breakfast at my favorite mom and pop place, just doen the street form my office. 2,99 bacon eggs and toast... cant beat it!

One of the other reasons I go there is to network. The president of my bank (his name is Tony as well) pops in as well as some other folks in the community.

I use National City, which was just gobbled up by PNC with Tarp money...

Tony came in Tuesday, and we sat together. The thing about these meetings is that they are just two guys having coffee... He said something that stuck me as odd. He said he doesnt understand the new bosses. They are holding the better houses to wait for the market to come around... Yet the market cant "come around" until the money is loosened up a bit and put on the street.

Just a bit of insight... over a cup of coffee..

Hey guys I am somewhat of a newbie in the investment world. When you say that there are different levels of waves of foreclosures, how many have we had and how many more are we expecting.

Nancy Dito

Originally posted by Nancy Dito

Hey guys I am somewhat of a newbie in the investment world. When you say that there are different levels of waves of foreclosures, how many have we had and how many more are we expecting.

Nancy Dito

Nancy,
1st wave - speculators and D paper subprime borrowers
2nd wave - subprime, ARM resets, builders

[b]
3rd wave - properties held back during the 4 month moratorium now released
4th wave - those hit by the recession, prime borrowers, unemployment, etc etc.

Originally posted by Jon Holdman

When is this moratorium supposed to end?

To my understanding, once the marked to market accounting practices are changed the banks will be allowed to sell of a distressed asset at a discount without that transaction adversely affecting everything else on their balance sheet, but only that one asset. Grapevine is saying by end of Summer.

When you say that there are different levels of waves of foreclosures, how many have we had and how many more are we expecting

The first wave was the subprime loans all defaulting casuing a massive amount of foreclosures as these folks had NO means to make good on their loans.
The second wave was the arm/option arm loans which all reset casuing homeowners and investors loan payments to skyrocket.

Now we will see the 3rd wave and that will be a combination of howmeonwers walking away simply because they are so far upside down with no end in sight along with the lenders finally releasing a large amount of their REO's into the market place.

We have been talking about this inventory for months. I was sure we would have seen it by now. Some are holding off on buying because they feel they will be caught by increasing inventory and decreasing prices. Others are buying anyway and hoping to time the lull in inventory right if it holds for another 2 months. Anyone not buying because they are waiting on the next wave?