There may be more than a triple whammy. At every point in history when a normal cycle hit bottom, the majority could just sit tight. Now it is not the case. Forget sub-prime, it was rampant in prime. At no time in history has even 20% of the mortgages been adjustable, neg am, teaser, etc. During the bubble in S.D. the number of non traditional mortgages exceeded 80% of new purchase financing in the county. Never before have we seen this dynamic, where time is against people attempting to ride it out. I’ve never seen anyone release data as specific as I need to illustrate this point, but buyers in 2004,2005,2006 and their percentage of underwater, distress and resetting mortgages with no viable escape and no ability to ride it out, what is their foreclosure rate? I’ll bet it breaks 50% for that specific group before we are all done. At no time has the average Southern California been so ill equipped to ride out the bottom, not even close, so anything that happens wont suprise me.
