The next wave of foreclosures (Florida/Charlotte County newsletter)

By Joe Nunez

Is there a glimmer of hope for Charlotte County? That seems to be the question that weighs on residents' minds. Charlotte County's unemployment rate for the month of December 2008 was at a jaw dropping 9.9%, far above the state's rate of 7.6%. Coupled with declining home values, Florida's budget deficit, and the unsettling question of where our nation is going, brings little hope for a turn around soon.

Although real estate sales seem to be picking up, there is another evil that looms around the corner. Alt-A loans, or as we like to call 'liar loans' or 'ninja loans' (no income, no job, no assets), were thought to be less risky for lenders. Alt-A recipients were supposedly more qualified than sub-prime borrowers, and this is where the fallacy lies. Alt-A mortgages were given to consumers with decent credit, but who may not of had typical documentation proving their finances.

According to the Federal Reserve Bank of New York as of December 2008, 43.6% of Floridians with Alt-A loans have at least one late payment in the last 12 months. Let us not forget that more than half of the Alt-A universe is going to see, or already has seen, their interest rates reset. These toxic loans, which exceed the number of sub-prime loans will continue to reset in 2009, 2010, and with the largest percentage of 36.7% set to adjust in 2011.

Poor government policies and the push for home ownership, along with the expanded money supply caused by the Federal Reserve, carved a path for easy credit, greed, corruption, and manipulation.

So where does all this leave us? Where's that glimmer of hope? Let us look at the other side of the coin. With the surplus of foreclosures on the market, and possibly more to come, there is opportunity! For one, I am seeing people who were struggling to find employment, find work through these distressed properties. Cash buyers and investors are capitalizing on current market conditions.

Most homes purchased are sold as is, and in desperate need of some sort of maintenance, therefore creating jobs. Second, historically low interest rates, great inventory, and new homeowner incentives creates great buying opportunities. With home values still on the decline, they become more and more affordable in the eyes of those who never thought it possible of owning a home at a realistic price.