Interestingly enough I came across an article that mentions the numbers regarding the cure rate. Basically cure rate is the percentage of portfolio of delinquent mortgages that are brought current or paid. According to Fich Rating, a global credit rating agency, the cure rate among prime fell to 6.6% from an average of 45% during 2000 through 2006. At the same time Alt-A fell to 4.3% from 30.2% average and subprime fell to 5% from a 19% average. Unbelievale numbers that exposes the fragile state of our economy.
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I don't know if you've been hearing the rumors, but there's a gathering consensus that the sub-prime mortgage market was just the beginning of the REO wave, that next up we're going to see more "prime" mortgage defaults and foreclosures. Check out this article from the New York Times, for example.That's my sense of it, surely. Most of the REO listings I've been getting have been in Watsonville, and most of them, I'd guess, were sub-prime borrowers stuffed into loans they couldn't really afford.Now, I think we're going to be seeing lots more prime-borrowers, stuffed into loans that they could barely afford, but with with Americans being profligate spenders and abusers of debt, they have now borrowed themselves into a hole from which the only escape is foreclosure and/or bankruptcy.I kind of went through a blessed dry spell where I was not really getting many BPOs, maybe just 2-3 a week. I have kind of cut back, anyway, ignoring all broadcast requests and accepting just the BPOs from my bread-and-butter companies who also give me listings.This week, though, I have had as many orders as I've ever had - and, interestingly, many of these are higher-end properties. Some of them are very high-end: estate type properties on acreage, or beach properties with ocean views, etc.Time to wax my surf board and get ready for that next wave, I guess.
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