I have been happily sitting in a rural/resort area on Lake Oconee and have counted blessings that the subprime was not nearly as devastating as in other parts of the country. What I have feared was coming is starting to show up now though. Alt-A & Option Arm loans made in 2006 - 2007 & on are starting to make their way to the legal ads. This area has many upscale, gated, golf communities on the waterfront and a large proportion of those are 2nd/vacation homes. This month, I have seen more than ever before being advertised in the foreclosure papers and I don't think it's stopping anytime soon if the BPO orders are any indication.
Florida is by far the closest to my kind of market as so many homes there are not primary residences- lots of vacation homes, condos & the like. There is virtually NO help for this market as there is no incentive for loan mods and these are not homeowners that will be put on the street - they are investors who bought a 2nd home and now can't keep up with the payments or refinance because the payment has gone up while the value has gone down. I can't help but think that the 2nd home market will be on the ropes for some time to come. Not much finance-not many qualified buyers with enough cash to buy the mid-level homes coming to market & priced too high for investor flipping. I think it may be a rocky ride for a while.
Is anyone else seeing this type loan predominate? LPS analytics has a report that paints a pretty grim picture of where 'prime' loans may be going as well as 'mini-jumbo'. Owners are hanging on but the question I ask is 'how long can they last?"