      
 Alt A and Option Arm Loans Ignite the Next Real Estate Melt DownPublished: Monday, December 22, 2008 Just when you thought the market couldn't get any worse, Whitney Tilson, the founder and Managing Partner of T2 Partners LLC and The Tilson Mutual Fund, explains in an interview with 20/20 that the real estate market is in for round 2 and that we are approaching yet another real estate melt down. According to Mr. Tilson, the future looks bleak. If you believe that the subprime mortgages were the culprits behind the large influx of foreclosures nationwide, then you'll be surprised to hear about the new storm looming. Option Arm loans and Alt A loans are the next to plague Wall Street according to Mr. Whitney. Like the subprime loans, Alt A and Option Arm loans are all backed by securities. Option Arm and Alt A loans were instrumental in securing loans in which the buyer could not afford the home they were attempting to buy. Typically these loans were called teaser loans with very low introductory rates which were to reset between 3-5 years. And guess what, it's time for them to reset. Mr. Whitney explains that homeowners who elected to use these types of loans could see their mortgage almost double once the loan resets. Mr. Tilson predicts that 70% of the Option Arm and Alt A loans will default. This figure was derived from the current trends in foreclosures. Mr. Tilson explains that as of now a large number of homeowners are defaulting on these loans, even before the loans have adjusted. The number of foreclosures will no doubt grow in the coming months. Contrary to what many spectators forecast, Mr. Tilson believes that this crisis will last for more than twelve months. He believes it will last for another 3years. What he does believe is that this is a great time to buy foreclosed property. In the coming months and years investors can expect to find killer deals at real estate auctions. Keep an eye on the market and you can be sure to secure some very smart investments. Other Recent ArticlesHome Buyer Tax Credit Extended Until April, 2010Category: Recent Articles Published: Thursday, December 10, 2009 The federal tax credit has been extended to April, 2010, including an expanded benefit to existing home owners who sell their homes and then repurchase a new primary residence valued at $800,000 or less. This could be the perfect opportunity for buyers who wanted to cash in on home auction bargains but were fearful of lower resales on their existing homes. 57,000 Foreclosures Remain in California – Lenders Scheduling More Home AuctionsCategory: Recent Articles Published: Thursday, December 03, 2009 The Southern California foreclosures market may be shifting, with fewer homes entering foreclosure than in previous quarters. However there are still 57,000 existing foreclosures statewide that need to be sold, and lenders are looking at foreclosed home auctions as a major tool to sell large numbers of foreclosures in a short amount of time. Southern California Foreclosures Still the Bulk of Home SalesCategory: Recent Articles Published: Friday, November 27, 2009 Southern California foreclosures still account for the bulk of area homes sales and lenders are finding real estate auctions the fastest and most efficient method of clearing their books of REO properties. Buying a home at auction requires a little prep work, however and the experts at homeauctionexpo.com share their insight on how to find the best auction properties.  December 2008
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