Monday, June 26, 2006

'A Silver Lining At The End Of The Tunnel'

Inman News has this report from Realtytrac. "The number of U.S. properties entering the foreclosure process gained significantly in May from a year ago, according to an industry report released today. A total of 92,746 properties nationwide entered some stage of foreclosure during the month, up 1.7 percent from April and 28 percent from May 2005."

"Colorado posted the nation's highest foreclosure rate for the third month in a row thanks to increasing foreclosure activity in May. The state reported 4,198 properties entering some stage of foreclosure, a 13 percent increase from the previous month and a 41 percent year-over-year increase from May 2005."

"Georgia's foreclosure rate, one new foreclosure filing for every 537 households, moved up to second highest in the nation in May after ranking fifth highest the previous month. With 5,769 properties entering some stage of foreclosure, the state's foreclosure activity increased 12 percent from the previous month and almost doubled from May 2005."

"Texas reported 14,506 properties entering some stage of foreclosure in May, the most of any state for the sixth month in a row. After three straight months of decreases, Florida foreclosure activity increased more than 6 percent in May, with 8,898 properties entering some stage of foreclosure."

"California reported 8,736 properties entering some stage of foreclosure in May, a 1 percent decrease from the previous month but more than twice the number reported in May 2005."

And from the Dallas News. "Emotions on the housing bubble have never run so high. The data on rising inventories and stagnating prices speaks for itself. Any lingering doubts were dashed with last week's news: Some $1.3 trillion in adjustable-rate mortgages will reset within the next 18 months; building starts popped, sealing sellers' fate; and try battling with 4 million other sellers to attract buyers' attention."

"But, there is a silver lining at the end of the tunnel: No matter how bad things get in the aftermath of the housing-induced slowdown to come, certain industries will flourish."

"Cottage industries all over the country will benefit from the inevitable rise in foreclosures. Attorneys, real estate agents, property managers and appraisers who specialize in this area will regain their footing after years of slowing business."

"As for investors, the rise of distressed debt funds ensures there will be a way to invest in companies that lose more than their fair share of valuation. Many subprime lenders will emerge battered from the storm but with steady, established franchises. 'There are banks that are overexposed to adjustable-rate mortgage risk,' Mr. Halpern said. 'But it's the shareholders, not the depositors, who will have the problem. That creates a silver lining for those who invest in distressed debt.'"

"If you think these suggestions sound too esoteric now, wait a bit. The availability is sure to present itself soon enough."


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