Potential future market trend - Posted by Ben (FL)
Posted by Ben (FL) on June 25, 2001 at 09:16:47:
I’m reading the Cashflow Quadrant. Kiyosaki talks about how he and other investors twith established cash machines were able to take advantage of the huge volume of foreclosures dealt by the RTC resulting from the passage of the 1986 Tax Reform Act and attendant closure of all the loopholes relating to passive income losses. Anyone with the ability to find cash could pick up all ther eal estate they could handle for pennies on the dollar.
My appraiser just completed the FHA appraiser education and certification. He learned that Fannie Mae had recorded a record LOW number of foreclosures over the past year. Why? Because there were so many people in default, instead of foreclosing on them all, they restructured the notes by adding the arrearage to the balance. Now, how many of those people are just going to end up in default in the next couple of years? I’ll bet most of them will.
I am continually amazed at the types of people that can get loans, these days. I’m even more surprised at how often a finance company like Citifinacial or Greentree will loan money on a second mortgage for up to 125% of the value of a house - and that is even based on VERY generous appraisals. People call me every month that are facing foreclosure because they got a 2nd and 3rd mortgage, and of course now cannot handle the payments.
It seems to me, that very soon there will be a flood of foreclosures - even more than there are now. FHA and VA will be overrun. The RTC, or something like it will need to be reinstated to handle the volume, and anyone with a source of cash, or the ability to find it, will be able to make a killing.