When Will We Notice the Elephant in the Room?

I agree with you. We are about to get hit again by the foreclosed properties that the lenders have held back, but there coming. However, I think there are still very good deals out there now.

Not every market is as dire as you broadcast. The negative news may apply in some places but Maine is 46th LOWEST for FSSR. (Foreclosure, short sale, repossession). The lower priced all the time homes,  safe rural areas of the country are not spiked up and down messed up. Not covered with burst property bubble market debris.

Nice Pic. Is there a universal way to reduce the mortgage balances?

Love the photo~ Living in Michigan (where, at one time we made cars) our markets are severly impacted by the REO markets.  It was reported that Flint has a 20% vacancy rate.  How do we come out to that? The next five years will be interesting.  DJ

I agree with your concept. It is mind boggling to me why lenders & investors would rather eat a $100k or more on a short sale or REO than do a loan mod that would keep a person in the house & possibly loose a lot less.  And the loan mods typically offered don't do enough to give people a motivation to hang on.

If someone was $100k upside down, even reducing their loan amount by $50k in some cases would be enough to help.

I just read that some gov. plan here in AZ is offering to match what a lender is willing to eat on a loan mod up to $50k & that B of A is signed up.  It means, as I understand it that if someone was say $100k upside down, that the loan mod would get the lender to eat $50k & that the gov. program would then match the amount to the bank so the total reduction to the borrower would be $100k.  Wow, I hope it works.