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Is there a second wave of mortgage defaults on the horizon?  According to the following “60 Minutes” report, not only is the answer YES, but it may be as big as the first one.


The first wave of mortgage defaults was the sub prime meltdown.  Those were the loans given to borrowers with low credit scores and unverifiable income.  This second wave that 60 Minutes has uncovered is comprised of “Alt-A” and “Option ARM” loans that were given to high credit score, completely verifiable income borrowers.  So what’s the problem, you ask?  These were loans created so that people could obtain a larger property than their finances would afford.  The first 3-5 years, the loans had very low interest rates and/or monthly payments.  But now, with real estate prices plunging, when the payments for these loans return to the normal amount, many, many people are going to be stuck having to pay on a loan that is far larger than the property value.

The beginning of this new wave is already here but it is predicted that by 2010, it will reach its peak.  Their is one major difference between wave #1 and this new wave.  Wave # 2 involves very nice properties in very nice areas.  To short sale investors like myself and my students, this could be the greatest economic opportunity of our lifetimes.  That’s a bold statement, but it could be absolutely true!  

With short sales, you make more money, the bigger the deal.  So this second wave should be an even bigger massive financial windfall for us.  Which brings me to a very personal question for you…

Are You Ready?  Are you prepared for this? 

Or are you the type that can you look in the mirror and honestly say that you are not interested in what could be the biggest financial opportunity for ordinary people since the gold rush?  If so, good luck to you.  But for those of you who know that this could be your last chance at a making a million or more dollars in a very short period of time, I want you to listen up. 



Nancy Geils, Investing with the Stars


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