According to the company Default Research (company that provides foreclosure data), Washington State, has recorded a 15% home foreclosure increase.
Default Research pointed out that two states hit hard last year by foreclosures were Florida and California. This year the two states are polar opposites. In fact, Florida, foreclosure rates continue to go up more than 20%. California, on the other hand, only had a minor increase of four percent, mainly in the northern bay area.
The Default Research Co. president said: "Now, unfortunately, the country is in a national housing slump, which produces decreased home sales and reductions in home prices." [tags]home foreclosures,home loans,foreclosure,housing bust,real estate bust,housing slump[/tags] San Diego MLS
In an attempt to steer away from interest only loans yet still provide borrowers a payment they can afford the mortgage industry has embraced 40 and 50 year amortization.
Most people underestimate the impact of lending on the size of the pool of buyers. We’ve essentially increased the homeownership by 5% OF THE TOTAL POPULATION in the past 10 years.
That’s incredible and unprecedented in history.
All due to lax lending and favorable tax treatment of payments and gains.
It’s going to be a doozy of a hangover when we at least revert to the mean.
The number of foreclosures you are seeing now are just the tip of the iceberg. Too many people bought in over their heads, so now sooner rather than later they won’t be able to make the payments. Brace yourself.
How do you make money? A couple of possibilities.
First, learn about “short sales.” It’s buying a home for less than the
existing mortgage. You negotiate with the lender. Even better if
there’s a second mortgage on the property. You can often “buy” (that
is, get rid of) the second mortgage for pennies on the dollar. So,
that $500,000 home might have a $400,000 first mortgage and a $100,000
second mortgage. You persuade the second mortgage holder to take maybe
$5,000 or $10,000 (at most) for the second…because, otherwise, he’s
going to lose everything. You negotiate with the bank for a smaller
first, or at least a restructuring of the mortgage.
It works even better, of course, if there’s some equity in the property.