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It's only the first quarter of 2009 and homes are already selling for as much as 80% off 2005 prices..And the truth is...it's going to get worse (a lot worse).
You may be saying: "what's the point"? "What's that got to do with me"?
SIMPLE: About once every 25 or 30 years there's an opportunity for someone (like YOU) to buy a home at an absolute STEAL. But you need to have your CREDIT SCORES in line or you're going to miss the boat.
HERE'S WHAT'S HAPPENING, AND HOW IT AFFECTS YOU
We are in the middle of the worst housing crises this country has seen since the great depression. And it is NOT getting better. It began when subprime borrowers started defaulting on their loans.
But if you think subprime lending was a mess, are you familiar with ALT-A lending? These were the Option ARM, Stated Income, 125% Loan-To-Value, and other types of "Exotic Loans" that were so popular in 2005, 2006, and 2007.
ALT-A Loans represent 1.5 TRILLION dollars of home loans. ALT-A loans are even MORE of a mess than subprime loans. ALT-A loans were generally made on more expensive properties and by wealthier people with GREAT credit scores. But when these loans started going upside down (no equity), the borrowers would just walk away when the loans reset to higher payments.
After all, if the borrower had $100,000 or $200,000 dollars in the bank, and a good credit score, they weren't too concerned about the consequences of defaulting on their loans. Unlike the subprime borrowers with no cash or credit to back them up, the ALT-A borrower could rebound quickly from a foreclosure on their record.
THE FIRST SIGN OF TROUBLE
The first sign that subprime loans were in trouble was when 14% of subprime loans were in default. Right now, in the first quarter of 2009, 14% of ALT-A loans are in default.
There were a total of 500,000 subprime loans made, and a total of 750,000 ALT-A loans made. (50% more). The majority of subprime loans averaged $200,000, while the majority of ALT-A loans averaged $400,000.
Half again as many ALT-A loans and double the average loan amounts.
Many knowledgeable people predict ALT-A defaults will start hitting big time around JUNE / JULY / AUG of this year, and continue through 2011 or even until mid 2012. That means the worst is yet to came.
WHEN OPPORTUNITY MEETS PREPAREDNESS
However, as bad as it is, the housing crises has created an opportunity for YOU to purchase your "dream home" at a severe discount... BUT ONLY if you are prepared! And NO! It does NOT matter what your credit scores are like today!
Keep in mind when you begin applying for financing, lenders always place the most weight on the last 18 to 24 months of your credit history.
SO.... If you're smart you'll start working on re-building your credit history TODAY, so it will be there when you need it 18 to 24 months from now. And, there's never been a better way to clean up your credit scores fast than the one I recommend here.
Think ahead. The future belongs to those who are ready for it!
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