Monday, March 31, 2008

Uh Oh

Why does the phrase "Train Wreck" spring to mind here?

Philadelphia suspends sales of foreclosed homes
By Jon Hurdle

PHILADELPHIA (Reuters) - Authorities in Philadelphia will suspend foreclosure sales of homes whose owners have fallen behind on adjustable-rate subprime loan payments -- potential relief for tens of thousands of struggling debtors.

Sheriff John Green said on Friday he would halt sales of foreclosed properties in April and would seek a court order extending a moratorium for an unspecified period...

Now multiply this by about 100 other municipalities in the United States and you have a recipe for disaster in the market for buying homes with borrowed money.

That said, you also have the potential for investors who know how to game the system in their localities to strong-arm mortgage companies and banks into off-loading the affected properties - for those of you with money and connections, if this type of intervention comes to a city near you (and I strongly expect that to happen - this kind of thing has strong socionomic tailwinds to it) you might see where you can pick up some property on the cheap, even if the title might be a bit muddled.

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