It’s not over yet!  That’s the call of many real estate experts.  The third wave is coming, they say.  Home Foreclosure has been one of the largest contributing factor to the economic downturn.

 

Experts have broken the home foreclosure problem in to 3 distinct waves.  The first wave was when the speculators walked away from the homes that they had bought.  These were largely investment properties

 

The second wave was when the introductory annual percentage rates ran out.  Once this happened, the interest rates on these mortgages were reset higher leaving consumers unable to pay the significantly higher home payment.

 

The third way, which experts say has begun, may be the most widespread.  As a result of an economy that is barely keeping its head above water in some areas, many Americans who had good credit, full time jobs, and responsible payment history are finding themselves unable to pay their mortgage because of job loss, reduction in hours, loss of overtime hours, loss of bonuses, and the many other perks that came with companies who, at one time, thrived in a healthy economy.

 

That simply isn’t the case any more.

 

What is the lesson here?  I don’t want to be the person who kicks somebody while they are down but the lesson is first to stay far away from debt.  As sad as this third wave is, one of the reasons that it is so widespread is because America is in love with debt.  We are deep in debt and often flirt with the line of being overextended.  We operate in the “it won’t happen to me” world and because of it, phase three is forecasted to be the largest meltdown.

 

The only good news to come from this may be that our economy may be better equipped to absorb some of it.

 

Stay out of debt, don’t live beyond your means, and save as much money as you can.  Meltdowns and recessions are not a big deal when your bank account is prepared.