In further edited excerpts from the original article* Jeff Nielson (www.bullionbullscanada.com) goes on to say:

With more than one in ten U.S. mortgages (of all categories) already in default, the biggest wave of “adjustable-rate mortgage” re-sets does not begin until next year – and then will remain at that peak level for at least one full year.

While the U.S. government and their media-parrots originally tried to deceive people into believing this was a “subprime crisis” the reality is that all categories of U.S. mortgages (including “prime”) are at the highest default rates in history and it is over the next two years that defaults are guaranteed to get really bad, really really bad.

Do not confuse what I’m saying as meaning that the U.S. housing market will “bottom” in 2011. That is NOT what these numbers say at all. What the numbers say is that the U.S. real estate collapse will stop accelerating some time around, or a little before, then.

After that the U.S. market will have to slowly work through the largest inventory of unsold homes in history – ANYWHERE! Currently, there are over 20 million empty homes in the U.S. Many of these homes have been severely vandalized (or even burned to the ground), but these “assets” sit on the balance sheets of U.S. banksters – at valuations far above what they could ever possibly hope to receive.

Millions of these homes will simply have to be bulldozed to the ground, because there will never be enough buyers for all of them.

After the U.S. housing collapse stops accelerating downward, some time around 2011, the collapse will gradually slow down (over a period of several additional years). At that point, after the U.S. economy has lost over $30 TRILLION of “paper wealth”, and at least 30 MILLION jobs, the U.S. housing market will almost certainly remain depressed for several additional years.

Be well advised: buying a U.S. house today, even with prices already down roughly 30%, would still be one of the worst investments in history. Think about that the next time a U.S. propagandist spouts the word “bottom”!

*http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=430:us-mortgage-crisis-to-get-much-worse-in-2010-11&catid=51:commentary&Itemid=99

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Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com, provides below further reformatted and edited [..] excerpts from Ian Cooper’s (http://www.energyandcapital.com/) original article* for the sake of clarity and brevity to ensure a fast and easy read. Cooper goes on to say:

Teaser Features Ending
Why is that? Because lenders created these ARMs with “teaser” features for borrowers – features that included making lower minimal payments for the first few years before the loan reset to a higher payment schedule. If that weren’t bad enough, there was another feature called “negative amortization,” which meant you weren’t paying back any principal. In fact, with negative amortization loans, your loan balance increased over time. Incredulously, every time you made a payment, you owed the bank even more. These are the loans that allowed consumers to buy houses they couldn’t otherwise afford.

About $750 billion worth of option ARMs were issued between 2004 and 2007 and will begin resetting shortly. Institutions like Bank of America (BAC), JP Morgan Chase (JPM), and Wells Fargo (WFC) are in for a rough ride, given their exposure to option ARMs.

Ramification of Resets
When the resets happen monthly payments on a $400,000 mortgage, for example, might well jump from $1,287 to $2,593 which will result in a larger number of foreclosures than did the subprime debacle. In addition, higher unemployment will cause many “homeowners” to strategically default on house payments, as it will be easier for them to just walk away, and the financial community will be left holding the bag.

Currently, according to CoreLogic, “underwater” mortgages account for +25% of all “homeowners” with a mortgage – that’s about 11.3 million “homeowners” – and according to the AP, more than 4 million “homeowners” (i.e. 8% of all Americans with a mortgage) are at risk of losing their homes. The fact that another dip in home prices is on the horizon as more glut hits the market can only exacerbates the situation. On top of that 60 Minutes found that at least another million Americans, who can afford to stay in their homes, have already walked away.

Foreclosures and Gold
History shows us that market panic sends smart investors to the ultimate safe haven of gold:
- the credit woes of the 1903s sent American investors to gold
- the U.S. subprime chaos that began in 2007 was responsible for rocketing gold
- the European debt contagion alone is partially responsible for pushing gold up more than 10% this year already.

The current mortgage crisis – and the impending option ARM crisis that is about to be unleashed – will to be a major drag on the economic recovery and will send gold higher than it is today – much higher. This means you should be buying gold — or buying more gold — right now.

*http://seekingalpha.com/article/208150-the-coming-option-arm-crisis?source=email

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Lorimer Wilson, editor of www.munKNEE.com, provides below further reformatted and edited excerpts from the TheTrumphet.com original article* for the sake of clarity and brevity to ensure a fast and easy read:

13.5% of All Home “Owners” Are Behind in Their Mortgage Payments
Lender Processing Services reports that mortgage delinquencies have reached record highs – a whopping 10.2 % and the percentage is still growing. Add in homes that are in some stage of foreclosure and the rate for non-current mortgages rises to an astounding 13.5 percent or a total of approximately 8 million homeowners behind on their payments.

Foreclosure Rate Up 51.1% vs. Year Ago
That is not all. In February the total number of foreclosures jumped by 51.1 percent over February 2009 levels—which seems to indicate that banks are finally starting to face the music and starting to repossess homes.

Mike Whitney maintains** that “banks have been withholding supply to keep prices artificially high.” During the banking panic in 2008 and 2009, banks did not want to foreclose on homes because it would have pushed prices lower, and that would have affected the value of banks’ mortgage-backed security bonds—causing the banks more trouble at a time when many big banks were collapsing. The government too wanted to stop foreclosures, for political reasons, so a moratorium on foreclosures was adopted.

That moratorium ended on March 31, and now that the banks are stuffed with reserves (due to the bank bailout program), “there’s no need to continue the charade,” says Whitney. “So the dumping of backlog homes has begun” and the house dumping could turn into a flood.

Bank of America to Increase Foreclosures by 600%!
On March 29, the Irvine Housing Blog reported that Bank of America was set to increase its monthly foreclosures from 7,500 per month to 45,000 per month—a 600 percent increase. At this rate, Bank of America will foreclose on 540,000 homes over the next year. Other banks are set to follow suit.

“It’s a disaster,” says Whitney. It will affect everything from consumer spending to state revenues not to mention a national unemployment rate still above 17.5 percent and 20 million vacant homes currently saturating the housing market.

The American Reality
In the run-up to peak housing in 2007, upward of 40 percent of all job creation, by some estimates, within the U.S. economy was related to the housing market (builders, suppliers, real-estate agents, brokers, bankers, etc.). Those jobs are now gone, and unless housing prices not only stop falling but start rising, the jobs won’t be coming back again but here is the catch.

Before the housing market can sustainably regain its health, and before consumers can start responsibly spending again, housing prices have to be at a point where regular people can afford them. That means housing prices still need to fall.

*http://www.thetrumpet.com/print.php?q=7131.5659.0.0
**http://www.informationclearinghouse.info/article25230.htm

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Lorimer Wilson, editor of www.munKNEE.com, provides below further reformatted and edited excerpts from the TheTrumphet.com original article* for the sake of clarity and brevity to ensure a fast and easy read:

Round Two
Just when popular media suggests that the economy is back off the ropes, the Congressional Oversight Panel, which is charged with monitoring the banking system bailout, is warning that the economy could be headed into round two of the worst downturn since the Great Depression. “There’s been an enormous bubble in commercial real estate, and it has to come down,” says Elizabeth Warren, chairman, going on to say, “There will be significant bankruptcies among developers and significant failures among community banks.”

Main Event
So far this year, America is on track to see well over 100 banks fail—and this despite unprecedented government action to prop up the sector. During 2009, 140 banks failed—most of them related to the residential mortgage market but if Warren is right, America is just experiencing the opening jabs and the main event is yet to come. “[O]ver the next few years, a wave of commercial real-estate loan failures could threaten America’s already weakened financial system,” revealed the Congressional Oversight Panel’s report, titled ‘Commercial Real-Estate Losses and the Risk to Financial Stability.’ “Between 2010 and 2014, about $1.4 trillion in commercial real-estate loans will reach the end of their terms.”

Knockout Blow
Unlike residential mortgages, which can be locked in for 30 years, almost all commercial loans come due in periods between three to five years. Typically, when a loan comes due, the commercial property owner will simply roll over the loan—that is, pay back the original loan with a new loan—provided that his property collateral has not depreciated but that is precisely the problem facing commercial property owners. Commercial loans that were issued during 2005, 2006 and 2007—at the very height of the property bubble—are now up for renewal. According to Warren, however, by next year half of all commercial property owners with mortgages will be “underwater” and owe more than their properties are worth. This means that it may be impossible for them to roll over their loans, and their properties will be forced into foreclosure.

“There is a strong potential to see a thousand commercial real-estate bank failures in the next couple of years unless Congress acts to bail them out,” predicts economic analyst Mike Shedlock. “Of course no banks should be bailed out. [T]he correct decision is to let failed banks fail. The last thing we need is further bank zombification.” Unfortunately, when the banks go down you can be sure they will not go down alone.

Major Damage
A second banking crisis would trigger economic damage that could touch the lives of nearly every American. Think empty office complexes, hotels, retail stores. Think job losses. Think families being forced out of their apartments even though they never missed a rent payment. Think social unrest.

When the losses start hitting the banks as we head into next year, expect further reductions in lending as financial institutions scramble to shore up bottom lines. For a borrow-to-spend debt-based economy, a reduction in credit supply is like slipping a boxer enough tranquilizer to euthanize an elephant.

The current stock market and economic rally will eventually come to an end—and probably an abrupt one. If the economy was a prize fighter, you can picture it bouncing off the ropes, with legs wobbling, a loose jaw and a glazed look in the eye—with a freight-train-size fist labeled commercial real estate barreling straight toward it.

*http://www.theTrumpet.com/index.php?q=7021.5553.0.0

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In further edited excerpts from the original article* Charles Hugh Smith (www.oftwominds.com/blog.html) goes on to say:

Defaulted Mortgages Expected to Increase
While the numbers are imprecise, media reports suggest about one-quarter of all mortgage holders are “underwater,” meaning that their homes are worth less than their mortgages balances, and such negative equity (owing more than the house is worth, hence negative equity) drives foreclosures. As such, if 25% of mortgage holders are underwater, and 14% are delinquent/in default, then we can expect the number of defaulted mortgages to rise as negative-equity homeowners throw in the towel and stop paying their mortgages.

Rising Foreclosures = Falling Home Valuations = Increasing Defaults = Rising Foreclosures
Rising foreclosures pressure home valuations as hundreds of thousands of homes come to market. This decline in valuations increases the negative equity of mortgage holders who are already underwater, and pushes more owners into the negative equity pool where most will eventually capitulate and default on their mortgages. This increases the pool of mortgages in the foreclosure pipeline, insuring more homes will be dumped onto the market in the future, and so on.

Anyone who sees a rising pool of millions of delinquent mortgages as the foundation of a recovery in housing valuations isn’t considering the feedback loop which is now firmly in place. The foreclosure pipeline will be full for years to come precluding any “recovery” in housing valuations as supply will swamp demand.

*http://seekingalpha.com/article/199424-foreclosure-pipeline-is-full-to-bursting?source=email

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In further edited excerpts the TARP Congressional Oversight Panel Report Executive Summary* goes on to say:

Mortgage Refinancing Problems
Commercial real estate loans are taken out by developers to purchase, build, and maintain properties such as shopping centers, offices, hotels, and apartments. These loans have terms of three to ten years, but the monthly payments are not scheduled to repay the loan in that period. At the end of the initial term, the entire remaining balance of the loan comes due, and the borrower must take out a new loan to finance its continued ownership of the property. Banks and other commercial property lenders bear two primary risks: 1) a borrower may not be able to pay interest and principal during the loan’s term and 2) a borrower may not be able to get refinancing when the loan term ends. In either case, the loan will default and the property will face foreclosure.

The problems facing commercial real estate have no single cause. The loans most likely to fail were made at the height of the real estate bubble when commercial real estate values had been driven above sustainable levels. Many loans were made carelessly in a rush for profit. Other loans were potentially sound when made but the severe recession has translated into fewer retail customers, less frequent vacations, decreased demand for office space, and a weaker apartment market, all increasing the likelihood of default on commercial real estate loans. Even borrowers who own profitable properties may be unable to refinance their loans as they face tightened underwriting standards, increased demands for additional investment by borrowers,and restricted credit.

Declining Property Values and Revenue
Commercial property values have fallen more than 40 percent since the beginning of 2007. Increased vacancy rates, which now range from 8 percent for multi-family housing to 18 percent for office buildings, and falling rents, which have declined 40 percent for office space and 33 percent for retail space, have exerted a powerful downward pressure on the value of commercial properties.

Major Losses Projected for 2011 and Beyond
The largest commercial real estate loan losses are projected for 2011 and beyond. Losses at banks alone could range as high as $200-$300 billion. The stress tests conducted last year for 319 major financial institutions examined their capital reserves only through the end of 2010 and, even more significantly, small and mid-sized banks were never subjected to any exercise comparable to the stress tests, despite the fact that small and mid-sized banks are proportionately even more exposed than their larger counterparts to commercial real estate loan losses.

Diverse Economic Damage
A significant wave of commercial mortgage defaults would trigger economic damage that could touch the lives of nearly every American:
1. Empty office complexes, hotels, and retail stores could lead directly to lost jobs.
2. Foreclosures on apartment complexes could push families out of their residences, even if they had never missed a rent payment.
3. Banks that suffer, or are afraid of suffering, commercial mortgage losses could grow even more reluctant to lend, which could in turn further reduce access to credit for more businesses and families and accelerate a negative economic cycle.

Number of Banks Facing Insolvency Could Increase
It is difficult to predict either the number of foreclosures to come or who will be most immediately affected. In the worst case scenario, hundreds more community and mid-sized banks could face insolvency. Because these banks play a critical role in financing the small businesses that could help the American economy create new jobs, their widespread failure could disrupt local communities, undermine the economic recovery, and extend an already painful recession.

Conclusion
There is a commercial real estate crisis on the horizon, and there are no easy solutions to the risks commercial real estate may pose to the financial system and the public. An extended severe recession and continuing high levels of unemployment can drive up the LTVs, and add to the difficulties of refinancing for even solidly underwritten properties. Delaying write-downs in advance of a hoped-for recovery in mid- and longer-term property valuations, however, also runs the risk of postponing recognition of the costs that must ultimately be absorbed by the financial system to eliminate the commercial real estate overhang.

There appears to be a consensus, strongly supported by current data, that commercial real estate markets will suffer substantial difficulties for a number of years. Those difficulties can weigh heavily on depository institutions, particularly mid-size and community banks that hold a greater amount of commercial real estate mortgages relative to total size than larger institutions, and have – especially in the case of community banks – far less margin for error.

Until Treasury and bank supervisors take coordinated action to address forthrightly and transparently the state of the commercial real estate markets – and the potential impact that a breakdown in those markets could have on local communities, small businesses, and individuals – the financial crisis will not end.

*http://cop.senate.gov/documents/cop-021110-report.pdf

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In further edited excerpts from the original article* Dennis J. Ventry Jr. (www.ssrn.com) goes on to say:

Mortgage Interest Deductibility Hurts American Competitiveness
More mortgage debt meant lower taxes, such that the deduction began effectively subsidizing gambles on fluctuations in housing prices. As such, the MID amounts to a huge subsidy that causes massive efficiency-draining distortions in the economy. The most sure-fire way to improve the competitiveness of the American economy is to repeal the mortgage interest deduction.

Mortgage Interest Deductibility Worthless for Low and Middle Income Households
The MID is as inequitable as it is inefficient. It is the quintessential “upside-down subsidy: the greater the need, the smaller the subsidy.” It provides 10 times the tax savings for households with income exceeding $250,000 compared to households earning between $40,000 and $75,000. It is effectively worthless for low- and middle-income households, such that repealing it would significantly increase the progressivity of the income tax.

Mortgage Interest Deductibility Favors Taxpayers With Income in Excess of $100,000
Recent research also indicates that the long-touted but unproven putative social benefits associated with
homeownership and the policies propping it up remain unsubstantiated. It has been reported that the benefits from the MID and the deduction for property taxes are distributed as follows:
a) 4% of taxpayers with income below $50,000
b) 22% of taxpayers with income over $50,000 – $100,000
c) 73% of taxpayers with income above $100,000.

Mortgage Interest Deductibility Is of Minimal Benefit to Majority of Americans
Such disproportionately skewed benefits belie claims of the housing industry that the MID “is an important factor promoting broad-based home ownership.” In fact the MID does not help:
a) 65% of taxpayers who take the standard deduction,
b) nearly 50% of all homeowners,
c) 22% of mortgaged homeowners,
d) low income households and only minimal benefits to
e) middle-income households,
f) renters or
g) the elderly who either are no longer servicing mortgages or who have too little income to receive any benefit.

Mortgage Interest Deductibility Has Almost NO Effect on Home Ownership Rate
Indeed, if promoting homeownership is the desideratum of U.S. housing policies, then the MID is a terribly inefficient and inequitable vehicle. Experts are unanimous in that the MID has “almost no effect on the homeownership rate.” Policies promoting homeownership “should seek to increase the number of homeowners,” and “should emphasize the purchase decision, not the quantity decision.” Any tax subsidy “should be only the minimum amount necessary to switch people from renting to ownership, and it should not be available for anyone who would buy a house anyway.”

Repealing the MID would not affect housing prices nearly as much as special interests, such as the National Association of Realtors, claim. Moreover, the downturn would be largely temporary and would be focused on big, expensive homes. If policymakers were concerned about preserving artificially inflated home values for sellers of large, overpriced homes, the repeal could be phased-in over several years.

The Mortgage Interest Deductibility Should Be Eliminated
Eliminating the MID would:
a) only minimally affect rates of homeownership, and, again, only temporarily,
b) accelerate the buildup of home equity,
c) increase the saving rate
d) help households absorb income shocks and, most importantly,
e) make homes less expensive.

A Homeowner Tax Credit Would be Preferable to Mortgage Interest Deductibility
Using the money saved from repeal ($108 billion in 2010) to fund a tax credit rather than a deduction would positively promote homeownership. Unlike the MID, a tax credit for homeowners could be independent of home value or size of debt, which would prevent excessive borrowing and precariously high loan-to-value ratios, precisely the problems that fueled the current housing and financial crises. In addition, a home credit could be capped and indexed to prevent households in high-priced areas from receiving disproportionately large subsidies.

A home tax credit would be a considerably more progressive policy than the MID and simplify the tax code reducing the number of itemizers, and partially rationalize the treatment of homeownership under a net income tax that currently fails to tax imputed rent. Most importantly, converting the MID to a tax credit would influence the decision of millions of ordinary Americans to own versus rent, thereby substantially increasing the rate of homeownership nationwide.

*www.ssrn.com/abstract=1498784

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In further edited excerpts from the original article* Doug Casey (www.internationalspeculator.com) goes on to say:

Through most of U.S. history, residential real estate was not viewed as an investment. You didn’t buy a house to make yourself wealthy selling it to someone else. It was viewed as an expensive consumer good that depreciated – you bought or built a house to live in it, just as you bought clothes to wear or a horse to ride. It was just a part of life – a necessity, a convenience, but an expense.

Then, especially just after World War II, the government started to institutionalize mortgages, which is to say, add huge leverage to the housing market. That’s what has transformed houses into speculative vehicles. That trend has been building momentum over the decades, as more and more debt was centered on real estate. Mortgages turned into commodities futures contracts. It was a huge change from the days where you knew your banker, he knew you, and he was lending his own money.

Excessive Inventory
The result has been a huge amount of overbuilding, in residential, office and retail commercial real estate. It’s going to take years and years to work this off. In addition, the entire psychology of the market has changed.

I don’t believe this recession is going to end the way all the other post-WWII recessions have – with a new and bigger boom. This is a major, secular turning point. It’s not just another cyclical low to use to load up for the next run up.

Economic Depression is Coming
I think the economic depression we’re embarking on now – a depression being a period of time in which the average person’s standard of living drops significantly – will be much worse than the one in the 1930s. We can look at how bad things got then, as a minimum guideline for when to start looking for a bottom.

Lower Residential Real Estate Prices
Residential property fell 90% over a period of about five to ten years back in the late 1920s in some areas. There’s no reason that couldn’t happen today, especially in overbuilt markets like Florida, California, etc., but it could easily be much worse because in those days, most people paid cash, to start with. If you had a mortgage, you usually put at least 20% down, and the length of the mortgage was generally five years. Today, with even prime mortgages having much less money down, lasting 30 years, and floating rates, there’s much more leverage.

Higher Real Estate Taxes
There’s also another reason. The bottom back in the 1930s was famous for people being able to buy properties for just back taxes. Today, you can buy square miles of some cities, like Detroit, for back taxes alone – but nobody’s doing it. No one sees the $500 minimum bid as worth it, partly because the properties are likely to simply remain tax liabilities well into the future.

I’ve got to say that this is the big elephant in the room that no one is talking about. To me, more important than the overbuilding, more important than the amount of mortgage debt, is that real estate taxes are completely out of control in the U.S. Nobody talks about this, for some reason, but the fact is that in many parts of the U.S., you’ll pay 2% of the assessed value of your house to the government, just to live in it.

There are people across the U.S. paying $10,000, $20,000, and even $50,000 a year in taxes on what are actually quite normal houses. This is cash money that has to be coughed up, whether you have a job or not. And a lot of people are still going to be losing their jobs in the years ahead. We aren’t anywhere near the bottom of the employment situation.

I think there are going to be large numbers of places – and I mean all over, not just places like Detroit and Flint, Michigan – where you’re going to be able to buy whole tracts of McMansions for past taxes but you’ll think twice before doing it, because those taxes are going to continue. In fact, they’ll get worse. With government revenue from other sources falling through the floor, they’ll squeeze wherever they can, and your house is an easy target.

Higher Interest Rates
In fact, the situation will get even uglier. Interest rates are being suppressed to insanely low levels by the government in a truly stupid and doomed effort to stimulate the economy into renewing unsustainable patterns of production and consumption. Eventually interest rates are going much higher – because they must – to ten or fifteen percent, or more, as they did in the early 1980s. That’s going to put the final nail in the coffin of U.S. real estate.

Higher Utility Bills
There’s more. People are more likely to throw in the towel when they see what happens to their utility bills in the coming years. Water, garbage, but especially electricity, gas and heating oil is going way up. That means more cash money that needs to be paid whether you have a job or not.

Higher Transportation Costs
It gets even worse. Most of the overbuilding is way out in the suburbs in bedroom communities. People moved out of downtown areas because they became expensive, and transportation was cheap. Many people are not going to be able to afford to drive their gas guzzlers 100 miles per day, round trip, to a job that won’t have any prospects for a pay raise, since most people will be thankful just to have a job at all.

I think we’ll find significant tracts of suburbs that will be literally abandoned in the not-too-distant future. All that construction was a misallocation of capital, making the country poorer, even while – paradoxically – people thought it was a sign of wealth.

Commercial Real Estate?
So, no, U.S. real estate hasn’t bottomed yet at all and it’s not just going to be in residential real estate, which is where the little guy is going to get killed but also in commercial real estate. This is very ugly, and it’s just getting started.

Even when it does bottom, not everything selling cheap will be worth buying because you might have to wait generations before there’s demand for them again – and you’d need to spend money maintaining them the whole time. U.S. real estate will suffer from years of deferred maintenance by the time the final bottom comes.

A big part of the problem in the West is that we’ve been consuming more than we’ve been producing. That means that all these stores catering to unsustainable patterns of consumption and production are not going to have customers. They’re going to go out of business. Their buildings will be empty. Now, at some point, there will be a bottom, when buying such commercial property will make sense, but I can’t tell you when that will be. We’ll have to keep tabs on the situation and look for a confluence of a number of factors, including interest rates, taxes, demographics, energy prices, and politics.

Conclusion
At this point in time I am completely uninterested in speculating in U.S. real estate – and I don’t foresee being interested for at least five years. I reserve the right to change my mind, but I think it’ll be at least five years.

*http://www.investmentpostcards.com/2009/11/19/doug-casey-on-real-estate/

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See larger image The Meltdown Chronicles (Paperback) By (author) Leonard J Goodman List Price: $22.95 USD New From: $20.65 In Stock Used from: $19.53 In Stock

In further edited excerpts from his original article* Marco Benavides (www,realestateproarticles.com) goes on to say:

While we are slowly working out of the current credit crunch as banks ease restrictions, the effects or the credit crunch can still be felt. The subprime mortgage crisis was a contributing factor to the credit crunch, but it was not the only cause. In fact, lender permissiveness in lending and consumers spending beyond their means, even with poor credit ratings, were also major contributors.

Whatever the cause, the financial crisis led to unemployment, unemployment led to families in financial crisis, which led to loan defaults, which led to foreclosures, which led to bankruptcies, and it became a vicious circle. Homebuyers stopped buying, which led to an oversupply of homes, which caused builders to slow down or stop new construction projects, and the cycle continued. There was also a price correction, where home prices got down to levels not seen since 1993, but buyers were still not buying.

The real estate market is thought to have touched bottom and has been seen rebounding of late. However, housing stocks need to come down in order for the housing market to pick back up. For housing stocks to come down, buyers need to buy, and banks need to loosen restrictions, which has also been seen of late. Lenders are still being much more cautious than they were before the subprime mortgage crisis, but it is thought that they will never be as permissive as they were before 2007.

As restrictions are eased, more buyers will qualify for mortgage loans, more homes will be bought, and the real estate market will continue to fully recover, but it may take some time before everything is back to normal levels. There are people who have been turned down for mortgage loans in the past two years who should have gotten a loan, and these people will be able to find loans and perhaps at much better terms than they would have gotten two years ago.

Patience will win out in the end if buyers continue to be cautious and conservative in their spending habits. Many people have begun to fix their credit, and they need to continue taking the necessary steps to rebuild their credit scores.

The effects of the credit crunch on the real estate market have been serious, but negative trends will not continue forever.

*http://www.realestateproarticles.com/rss.php?rss=284

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
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See larger image After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade (Hardcover) By (author) Steve Bergsman List Price: $24.95 USD New From: $14.02 In Stock Used from: $15.64 In Stock

In edited excerpts from his original article* John Cutts (www.realestateproarticles.com) goes on to say:

In Maricopa County, Arizona, tax lien buyers can earn up to 16 percent annually if they acquire good liens. Lenders typically pay up all the unpaid taxes on properties they foreclose upon, so lien holders can expect immediate returns on their lien investments.

Investing in real estate tax liens is ignored by some investors, but tax lien experts say returns from them are more dependable than other property investments.

In the tax-lien bidding process, investors bid for the best interest rate, starting from 16 percent and going down in increments of 1 percent, 2 percent or 3 percent or higher whole-digit increments. The interest rate goes down as the bid progresses.

In the case of Maricopa County, the average bid last year was 8.7 percent. This year, the level of opportunity for investors is likely to become the highest in years as record numbers of foreclosed houses and sharp declines in real estate values caused a sharp spike in unpaid real estate taxes in 2008. These tax liens will be sold off to investors in an auction in February.

According to tax lien experts, investors should do their research on the liens, especially liens involving foreclosed houses. They said that some properties could be deemed environmental hazards or could be sold off at a price not enough to pay the tax liens.

*Original Post: “Earning Money from Foreclosed Houses by Buying Tax Liens” on Foreclosure-Support.Com.

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
- Sign up to receive every article posted via Twitter, Facebook, RSS feed or our Weekly Newsletter.
- Submit a comment. Share your views on the subject with all our readers.
- Buy the book below from Amazon. It’s pertinent to this article and inexpensive too.

See larger image Profit by Investing in Real Estate Tax Liens: Earn Safe, Secured, and Fixed Returns Every Time (Paperback) By (author) Larry B. Loftis List Price: $22.00 USD New From: $12.79 In Stock Used from: $12.78 In Stock