Temeculaguy: Take that one step further. All of this is built upon an insane amount of debt. Real wages have been stagnant since the mid-1970s, and American households have been sustaining the illusion of prosperity through ever increasing amounts of debt.
A great many of those soon to be foreclosed upon properties were financed with 100% LTV loans. Add in those HELOCs you spoke of, as well as all of the commercial revolving debt and the picture becomes even grimmer.
Add in the coming credit crunch, add tightening lending standards and the fact that most banks have not hit the market with their REO portfolios yet and you start to get the sense of something really ugly. Then what happens during the next wave of mortgage resets? And the next?
