Many have said to us, why publish so much negative news. Where is the good news. Two brief answers. First, it is what it is. Facts are facts. It’s very important that you know what “is.” And next, by knowing the bad news — up front – you not only get a heads-up, but you can position yourself to take advantage of these dynamic and sometimes counter-intuitive-looking market conditions. Having said all that, here’s some really negative news on the horizon ….

According to the Blog, Dr. Housing Bubble – which typically highlights the California mortgage implosion, and many feel is at the heart of America’s debt problem — learn the truth about Option ARM’s, Pick-a-Pay Mortgages, and Alt-A Loans: Looking at Wells Fargo, Bank of America and JP Morgan. 

Anyone who wants to project the future of banks’ balance sheets, and the extent that the feds will have to go to right the economy, this one’s for you.

The author concludes that we are in for some severe pain ahead. According to the piece — and this entry is well document and extraordinarily well reasoned — we are currently in the EYE of the $469 Billion toxic mortgage hurricane.   The problem that we will be seeing is the massive onslaught of recasts, not resets that will be occurring over the next few years. 

The full impact of this tsunami is projected to hit in full force in 2010 and we are already seeing many mortgage holders having trouble with actual recasts brought on by negative amortization.

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Posted in Residential Real Estate, Delinquency Rates, Subprime, Bankers, Mortgages, Market Trending | One Comment