End of year again. We have a couple of real exciting things in store in a couple of weeks. Maybe even before the end of the year that can benefit all of us.
The economy is on the brink of….lets say…major change. The world economy, not just US economy.
Real estate is a good indicator of what is going on since it is perhaps the largest and most visible industry. Recently many banks have started what is called an “Independent foreclosure review”. For certain borrowers (meeting certain criterion) there is an option to go through an “independent foreclose review”. All the request forms will be mailed out by Dec 31st 2011. The deadlines to mail in the completed requests is April 30th 2012. IN THE MEAN TIME THE FORECLOSURE ON THESE PROPERTIES WILL BE PUT ON HOLD. mmmhhh.
This means that these properties will most likely still be in foreclosure ALL NEXT YEAR – or atleast till Oct next year.  A person staying ‘free’ in a house (or collecting rent) will want to delay the inevitable foreclosure. So if they mail in the forms as late as they can, say on April 20th. The review will take atleast 45 days. Lets assume worst case and they get ‘rejected’. The property will be back in foreclosure and worst case scenario, it will take another 3 month for it to complete the foreclosure process. That means the property will be re-possessed some time in Sept or Oct and that is IF the final foreclosure process happens that fast after the review gets rejected, something very unlikely. Now what does that mean. That means more and more delay in completing the foreclosure process for properties that are in foreclosure.  That means a delay in the recovery of the real estate industry which translates into delay in the overall recovery of the economy.
The owners of most of these properties have not paid their mortgage payments for as long as 3 years. If a mortgage is  not paid it is safe to say that the taxes and water bills are not paid fully as well.  All of this has to slow down considerably (or stop) before we can say that the economic has bottomed out. Not to mention that even when the properties are out in the market (after they are re possessed by the bank) they still have to be bought by investors (or homeowners) otherwise they are just vacant properties. That is another source of delay in recovery since lending for property purchase is very tight.
Personally, I do not believe there is such a thing as a stable economy (strictly speaking) since an ‘active’ economy is always peaking or bottoming out around an ‘average’. But it is safe to say that as a nation we are far from a so called ‘average’.

If you still have not thought of getting  your financial future secure through means other than just a 9 to 5 job than I think this should be a wake up call. Other than the obvious wage cuts and job cuts, the current situation will bring tremendous opportunity for those who are prepared. Just the real estate opportunity will be tremendous with all those properties selling at rock bottom prices, much lower than their potential rent. Of course there are other trends that are also emerging. We will discuss those in later articles. Bottom line is you have to be prepared to exploit these trends.


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