Fourteen million homes are underwater; 2.3 million homes have less than 5% equity. And there are now, according to the Census, two million vacant homes ready to be sold — plus another seven to eight million are delinquent on loan repayment. Mortgage applications are down 40% since the $8,000 rebate program ended.
Deutsche Bank is out predicting that underwater mortgages will effect another six million to 20 million homes by the tail end of 2011. This alone could see a tidal wave of strategic defaults… especially in states with no bank recourse actions — Alaska, Arizona, California, Iowa, Minnesota, Montana, North Carolina, North Dakota, Oregon, Washington and Wisconsin, according to Housing Watch.
And on top of all of this, refinancing a home – especially one that’s underwater – is extremely difficult. Without a doubt, this will be met with many foreclosures over the next few years. It’s why we’ve been pushing foreclosure processing companies on Options readers… because these are the very companies that stand to benefit from the coming bombardment.
But just how bad is it out there? How bad could it get?
Here’s a look at weak housing data with Michael Feder, CEO of Radar Logic Inc. where Feder says the typical heavy buying season for homes has been weaker than expected. He also believes the market could see the “bottom fall out” as we enter an historical weak period. Check it out.