Banks will have tons of houses on their hands. They will force quick sales and the government may need to bail them out like in the savings and loan crisis of the 80’s.
When homeowners will be upside down they will say, “why am I working hard to pay the mortgage and will simply let the house go into foreclosure.
I believe there will be a recession in 08, many loan brokers, realtors will be layed off etc. Investors will have a good time though snatching up all the foreclosures.
In L.A. where I live almost everyone I know is in an ARM loan because they can not afford the smallest of houses at more then half a million dollars!
