Mangled Mortgage

In many parts of the country, the current lack of housing inventory has create multiple-bid situations for many buyers.  The shortage of inventory won’t last long, though.

There are a few simple pieces to the puzzle.

First, the big banks put a moratorium on new foreclosure filings toward the end of 2008.  Since it takes a few months to get from filing the notice of default (NOD) to a foreclosure sale, you can see the impact of November and December 2008 on today’s market.

Secondly, the number of NODs filed in January 2009 was at a higher level than we have ever seen.

Lastly, over half of the loan modification consumers are back in default after six months.  Some people simply don’t have the financial capacity to own real estate.

The good news is mortgage interest rates are extremely low and there is a new tax credit for first-time buyers who buy real estate before December 31, 2009.  Those two factors make the state of the market largely irrelevant.  We know it is a great time to buy real estate today.  Although prices could continue to decline, we won’t know the bottom until it starts to climb again.

American Debt

This is an interesting chart from Michael Hodges showing the total debt load in America versus the national income.  When I say, “interesting” what I really mean is “disturbing.”

You don’t have to be an economist or statistician to understand the relationship between the blue line and the red line.  Simply put, Americans as a whole are spending much more than Americans are making.  Our entire consumption-based society is a house of cards.

I’m not an alarmist and I don’t have a crystal ball, but it certainly seems unlikely that this situation is sustainable.  Could we be in for another bailout?  Another market crash?  What will that mean for inflation?  You can visit the inflation calculator if you’re curious about the history of it all.

If the average American household is buried in debt, the average American household will inevitably have trouble making the mortgage payment every month.  If you consider the unemployment rate and decreasing home values across the country, you can see why I’m camped-out in mortgage default capital of the country.  Our housing and economic woes are not going to be resolved anytime soon.

For professionals working in the real estate industry, Mangled Mortgage will teach you everything you need to know to serve your clients in this market.  Follow the link for ordering instructions.  Luck favors those who take action.

Due to overwhelming requests to make asset manager lists available, I’m starting a swap program.  If you have a list of asset managers, email info@mangledmortgage.com to get the ball rolling.

There is no charge for this service. I have an abundance mindset, therefore I know there is more than enough business for all of us, even if we were to share asset mangers in the same market.

I will collect the lists in a spreadsheet format and distribute them to all contributors each time there is an update.  Please do not send copyrighted lists or a list of banks and their main branch telephone numbers.

Notices of default were low late last fall, which is why there is a temporary shortage of inventory right now.  January and February 2009 show us the NODs are higher than they have EVER been before. This means there are many more foreclosures on the way.  If you need to sell your house in 2009, TODAY is a good day to do it.  If you wait until the next wave of foreclosures hits the market, the law of supply and demand will not work in your favor.

In February, a short month, there were 5287 Notices of Default filed in Riverside County (second only to Los Angeles County).  That’s a lot of late payments.

Learn how to capitalize on the distressed housing market.  Order a copy of Manged Mortgage today.