Have you heard that foreclosures are on the rise? Ummm, duh?? Unless you have been hiding under a rock on Mars, of course you know this. But what you might not know is why we are about to hit a HUGE bottleneck traffic jam within the next year unlike we have EVER seen... and  it might not be for the reasons you think.

THE ANALOGY: In this market selling an REO home is like racing in NASCAR.

THE GOAL: Sell as a fast as possible in the most efficient manner, beat out the rest of the competition, and move onto the next listing.

If anyone follows NASCAR they understand that the best racers have the best crews. The longer the pit stop, the slower the times. Pit crews work to keep the car running and the help the driver finish the race successfully. It truly is a team effort. What happens if the driver pulls in for a stop and the pit crew is missing? What happens when the pit crew is busy fixing another car? What happens if the pit crew is not trained and has to learn on the fly? What happens if the pit crew loses communication with the driver? What happens if the crew does not care about winning the race? What happens if the put crew does not like the driver and sabotages his car? What happens if the pit crew does not have the right tools to change the tires?

So, what does the have to do with real estate and the BOTTLENECK that is coming BIG TIME?

Look at the "road conditions": $71 billion of interest-only loans will reset in the next 12 months. The year after, another $100 billion are scheduled to reset.

To avoid the bottleneck the houses will need to get on the market and sold as quickly as possible. The first major concern is a capacity issue with service providers preparing homes for the market to get on the market. Many current bank owned homes are still stuck in the "pit stop". As homes are taken back from banks, service providers do the preservation work in removing debris and preparing the homes for the market. Service providers normally use untrained cheap labor to handle these jobs. If the lawn is cut improperly or even a light bulb is not replaced, the house will not be approved for the market. These little details cause glitches and delays all day long. To make matters worse, service providers are having to decrease their work loads because they simply can not meet the demands of the asset managers. This "pit stop" alone will cause a bottleneck WITHOUT the addition of more foreclosures about to hit the market.

"I don't feel I'm a step above anyone on this team. I'm just another link in the chain."  - Jeff Gordon