Yes, it is here. 2010 is the year of the real mortgage crisis. With nearly 2.4 million home mortgages expected to go bust in 2010 as compared to the roughly 1.7 million in 2009, the real issue is what is driving this crisis. It is the adjustable rate mortgages (ARMs) that were refinanced, approved, and set for the five year mark are coming due in 2010. It is all the 2005 5-1 ARM sales during that housing market boom.
The problem with these ARMs is the timing. It could not be worse. Many Americans are reeling from the nearly 50%, 60%, and even 70% losses in the stock market in the past year and now they are going to be forced to come up with extra money monthly to pay their once stable and now readjusting mortgage payments. Couple that with the interest-only loans shifting to a principal-plus-interest model and what we have is a perfect storm for a double-dip recession.
Many who have scrimped and saved to prepare themselves for the worst are investing their IRAs and 401(k)s in real estate. Many are turning to self-directed IRAs more and more, taking advantage of the deepest discounted real estate in decades.
Along with the struggle of readjusting ARMs and interest-only loans, many Americans have to get used to double-digit unemployment, severe deflation of the monetary supply in 2010 with strong expectations for hyperinflation in the years to come, as well as considerably less pay for work they have been doing for years. This is the upside for those who are currently employed.
Those without a job or career security are reeling with the one-two-three punch combination of the retrenching of the economy, the extremely high unemployment rate, as well as the significantly tougher job market with so many other qualified candidates applying for the same jobs.
That said, there are a few rays of light are shining through the darkness. The economy grew in the fourth quarter of 2009, rather than the steady decline that has been so prevalent since 2008. There has also been a focus by many organizations to show that there are plenty of jobs available in the current economy, as well as how to get an interview at these jobs.
Obama’s stimulus package, the American Reinvestment Act of 2009, is getting some credit for pumping money into the economy. How much is still being debated.
So for those who are scared to reinvest heavily in the stock market, what options do you have?
Take a recommendation from the many millionaires in America. 4 out of 5 millionaires made their fortunes in real estate. The ray of sunshine in a bleak economy is what it has always been. Real Estate. Many people are searching for new ways to learn how they can invest their IRAs and 401(k)s in foreclosures, preforeclosures, REOs (bank-owned properties), short sales and other real estate opportunities.
With the cheapest and deepest discounted deals in real estate in decades, it’s more important now than ever to learn how to use your self-directed IRA to earn steady income as well as provide a supplemental investment in real estate to your portfolio. Now is the time to secure yourself a wealthy retirement by investing in real estate.
Paul R. Whitacre is a managing partner at WealthyIRA.com. Our vision is to teach others to invest their IRAs and 401(k)s in the deepest discounted Real Estate in decades. Check out more at our http://www.WealthyIRA.com blog and follow us on Twitter at http://www.Twitter.com/WealthyIRA
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