For those of you who thought that we are seeing a light at the end of the tunnel in community association real estate, which was especially subject to speculation here in Florida, I respectfully suggest that you hunker down; it may be an oncoming train--bottom line? Get an aggressive collection policy and lock and load....
See more at my web site, www.condocollections.com
Last night 60 minutes aired a segment on the next wave of mortgage foreclosures expected to hit the U.S. The first wave that we have are still living through has to do with "sub-prime" mortgages. Starting in 2009 the variable arm loans and "Alt-A" loans will start to re-set. The statistics are showing that based on today's economy 70% of these loans will fail. The report focused on Miami-Dade and expected that area to be hit very hard. The hit is forecast to begin beginning first quarter 2009 through 2010. "Alt A" loans are defined as "a classification of mortgages where the risk profile falls between prime and sub prime. The borrowers behind these mortgages will typically have clean credit histories, but the mortgage itself will generally have some issues that increase its risk profile. These issues include higher loan-to-value and debt-to-income ratios or inadequate documentation of the borrower's income."
The 60 minutes report starts out: CBS... When it comes to bailouts of American business, Barney Frank and the Congress may be just getting started. Nearly two trillion tax dollars have been shoveled into the hole that Wall Street dug and people wonder where the bottom is.
As correspondent Scott Pelley reports, it turns out the abyss is deeper than most people think because there is a second mortgage shock heading for the economy. In the executive suites of Wall Street and Washington, you're beginning to hear alarm about a new wave of mortgages with strange names that are about to become all too familiar. If you thought sub-primes were insanely reckless wait until you hear what's coming."
The link below will take you to the full story where you can read it or watch the segment.