"You guys can do this..."
Saw this on "American Digest" , and I got the shivers, as it reminded me of a similar beating that I got about 7 years back, when the wife decided it was time to move up - at least I got lucky and did not buy in at a peak, or spend more than I could afford.
For those buyers who borrowed heavily, recently, there is a good chance the property is worth less than the amount owed. This is not too unusual with a car, but 20 grand isnt the same as 300. The dominoes are just starting to fall. First the borrowers punking out, leading to foreclosures. The lienholders, often, but not always, banks, will take most of the hit on the difference between what they are owed and the property will fetch, in what are sure to become a saturated bunch of markets.
It has happened before, as recently as the late 80s/early 90s, and will happen again. I saw folks make good money picking up condos in the market trough of the early 90s, renting them out to cover expenses, plus, then selling them after a dozen years or so at 200% or better profit to cost. Watch for the opportunities that will surface in the next few years.
You have to hand it to the banks, this time around. They did a very clever job of repackaging most of the sub-prime mortgages and selling them to cash rich entities, often overseas, who thought they were buying high grade debt. Buyer beware.
For those buyers who borrowed heavily, recently, there is a good chance the property is worth less than the amount owed. This is not too unusual with a car, but 20 grand isnt the same as 300. The dominoes are just starting to fall. First the borrowers punking out, leading to foreclosures. The lienholders, often, but not always, banks, will take most of the hit on the difference between what they are owed and the property will fetch, in what are sure to become a saturated bunch of markets.
It has happened before, as recently as the late 80s/early 90s, and will happen again. I saw folks make good money picking up condos in the market trough of the early 90s, renting them out to cover expenses, plus, then selling them after a dozen years or so at 200% or better profit to cost. Watch for the opportunities that will surface in the next few years.
You have to hand it to the banks, this time around. They did a very clever job of repackaging most of the sub-prime mortgages and selling them to cash rich entities, often overseas, who thought they were buying high grade debt. Buyer beware.
posted by Steve at 8/25/2007 03:55:00 PM
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