Research: 270 Days is Optimal Time in Foreclosure + Is Massive Refinancing During Bubble Years a Ticking Bomb?

[mEDITate-OR:

wonder what the foreclosure problems are about...

You will want to read both Jim's CR article, last one below.

and

the one by Keith Jurow, Ph.D., is a former senior economic writer for the Holt Investment Advisory of Westport, Connecticut

Together, they provide U.S. with a very interesting conundrum - foreclosures may not be what they seem.

and

strategic defaults and what is driving them may not be either.

Cogitate on this:

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Jim, there are some factoids that you may have to add into your equation:

 

First, that most if not all of the seriously underwater RE loans were in the sand states.
That most of the AltA and subprime RE loans were also made there.
That most of them were originate by the Big Bad Three = Countrywide, WAMU and Wichovia.
So, the most serious problems are VERY localized.

 

Second, there was a flood of REFIs in those same sand states.
where the "owner" pulled their paper profits back out of the equity, and spent it.
The numbers are truly staggering:  See:

 

Is Massive Refinancing During Bubble Years a Ticking Bomb?http://www.realestatechannel.com/us-markets/residential-real-estate-1/real-estate-news-mortage-refiancing-real-estate-bubble-fdic-financial-crisis-inquiry-commission-president-obama-home-equity-lines-of-credit-heloc-2633.php

 

His point, and mine, is that since they already have taken out ALL of their profits, they have NO equity.
All they have is a debt that they cannot sell, rent, refi again or pay off.
They have nothing to loose by a strategic default, except that debt.

"Freedom is another word for nothing left to loose...", so said JanisJ.

But, freedom ain't free.

 

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Wednesday, June 02, 2010

Research: 270 Days is Optimal Time in Foreclosure