Foreclosure and REO Properties Expert Advice

Five years ago I wasn’t a very popular guy.

A lot of folks didn’t want to talk to me about my thoughts on the coming real estate market. My forecast of this massive mortgage meltdown fell on deaf ears. I tried to warn anyone that would listen to me. Most didn’t.

As a mortgage banking veteran of over 23 years, it was not at all hard to see the problems on the horizon as loans to unqualified borrowers with undocumented assets or income and no money down loans were made.

Neighbors, family, friends, and even professionals in the business laughed and scoffed at my claims.

These same people are NOT laughing anymore!!! As a matter of fact, they are now asking me what will happen and what to do over the next 5 years.

For the record, I will tell you that it’s not close to being over, and here’s what I see.

Housing Crisis Nearing An End?

Though many politicians and Wall Streeters will tell you that the housing and mortgage crisis is nearing an end, one must note that they have been telling us this for some time and have been wrong.

Besides having a “conflict of interest”, they are wrong on one main point.

- The issue is not one of liquidity, but rather, one of solvency.

Pumping money into the system will help alleviate some of the symptoms, but will not solve the problem.

Unfortunately, only time and pain will clean up this mess.

The Economy Over The Next 3 To 5 Years…

Over the next 3 - 5 years, a series of what I call “tsunamis” will hit the global economy and cause far reaching “shockwaves” that will give us the worst economic times in 75 years. (The biggest one is yet to hit.)

- The first wave was the “Subprime” and “Alt A” loans of which all of us are aware of now.

- The next wave, forming as we go to press, involves defaults in credit card and auto loan securities.

This will cause many losses to lenders as the recovery rates on these loans are much lower than on mortgages.

As the US economy slows, followed by the global economy, the loss of jobs and the cut back in consumer spending will weigh heavily on “prime” residential loans putting further upward pressure on the number of foreclosures.

As the number of foreclosures continue to rise and home values fall further than most have anticipated, “home equity” loans will go bad as housing values will not be worth as much as the principle. (The New York Times estimates the outstanding amount of these second mortgages to be $1.1 TRILLION. )

Defaults in commercial loans will rise dramatically as consumers curtail their spending habits.

The timeline for this third wave is sometime in 2009. (In my opinion, this third wave will be the biggest and will cause the most damage.)

Beginning around 2010 and continuing until 2012+, the final waves will hit as the “Option ARMS” reset to much higher payments (and loan balances) to homeowners whose home values have been falling during this entire time period.

• The glut of inventory on the housing market will keep the pressure on home prices for years to come.
• The drag from the housing debacle will cause a lot of pain at the state and local government levels as jobs are lost (lower income and sales taxes are collected), revenues from the transfer fees of real estate sold, and other sources of money dry up.

Currently, the city of Vallejo, CA is filing for bankruptcy and will become the “posterchild” for all the defaults that will hit the “muni bond” market, and in my opinion, cause layoffs in the public sector for the first time that anyone can remember. The recession that is coming will be far worse than anyone can imagine or that anyone who knows will admit.

Prepare for the inevitable damage that’s coming.

This is not a good time to be taking risk and listening to people from Wall street that do not have your best interests in mind. They are already going back to their investors to offer them “new” ways to make money, having already lost them a fortune.

At Virtuosity Unlimited, LLC, we strive to give you unconflicted advise, offer wise counsel, and steer you away from the “get rich quick” schemes that have cost many their life savings.  We focus on helping investors acquire bulk REO properties, pre-foreclosures, and foreclosure properties in today’s market.

In addition, we are experts in helping homeowners in default navigate the foreclosure process and get out of their situation in a manner that helps them obtain their best possible outcome.

We’re not investors.  We work with ethical investors to help match them up to deeply discounted properties around the U.S.

Until next week,

- Tully

Virtuosity Unlimited, LLC
www.virtuositypro.com
866-4EXIT-PRO