More Loan Default Pain Ahead

These are the opinions of Robert Sheridan, CEO of Sheridan & Co., a Chicago-area real estate & development company. Their site is www.sheridanpartners.com/market.php

A Bad Thing for Housing Gets Worse

The lead article in the 8/4/08 issue of The New York Times by Vikas Bajaj, “Housing Lenders Fear Bigger Wave of Loan Defaults,” comes as no surprise. Bajaj’s reporting illuminates a problem that has been apparent for a long time: foreclosures will be greater than recent estimates (now, even homeowners with good credit are finding themselves caught up in the morass) and price declines are likely to be deeper.

What is not immediately as obvious is that this bigger-than-expected wave of defaults will likely push “the bottom” out further. It’s hard to see it occurring in most markets before 2010.

Read the article here:

http://www.nytimes.com/2008/08/04/business/04lend.html?_r=1&scp=2&sq=vikas%20bajaj&st=cse&oref=slogin

Phil Collins of IL 1:04PM August 18, 2008