First off, I believe the lag time is longer then 6 months regarding a reset and then a foreclosure. I think in reality it is closer to 9 months. The banks are so overwhelmed that it seems NODs don’t even go out until the 4th or 5th month after the first missed payment. Then there is another 3 months for the NOT. It is now becoming commonplace for NOTs to get postponed. I have a listing right now and we just received our 4th postponement while the lender reviews another offer.
So I think the shift to the right is greater then suspected.
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I give odds of at least 50/50 that we WILL see a socialization of housing coming with the next president. If it is Billary then those odds are higher. If it is Mcopentheborders the odds are a little lower. The program arraya posted about is a perfect example. Don’t be surprised if YOUR government subsidizes these homes.
The BEST CASE will indeed be if this second wave hits. In the end yeah we would see another 2 years of very nice price declines in areas that most of us want to live in thus pushing a bottom out until 2012.
4plex your example is a good one however don’t underestimate the establishment to get around the catch you posed. If the gov and banks can simply change the rules. Why not amortize the loan over 50 years, 100 years? Why not just have the taxpayers suck up more then the 180k that is owed in your example where they continue to subsidize the difference between what the owner can afford and what the real payment should be?
