By Matthew Kirdahy, Forbes.com

October 12, 2007

A mining community has struck gold — with tech jobs.

Topping the latest ranking of out Best Cities for Jobs list is Salt Lake City. The Crossroads to the West, an economy that has been predominantly driven by the mining and steel industries, has developed into a service-based city and has become a tech sector hub for digerati migrating from Silicon Valley.

The city also had almost the lowest rate of unemployment in 2006, a tick behind Honolulu, and ranked 19th overall.

In Pictures: Best Cities For Jobs

To compile the rankings for the Best Cities for Jobs list, we used five data points, weighted equally: unemployment rate, job growth, income growth, median household income and cost of living for full-year 2006 (only partial data is so far available for 2007). We measured the largest 100 metropolitan areas, as defined by the U.S. Census Bureau, and obtained the data from Moody’s Economy.com.

It’s important to note that this list doesn’t weight for specifics like job composition or job stability, two significant characteristics that will appeal to any job seeker.

Mark Zandi, chief economist and co-founder of Moody.s Economy.com, said this ranking shows job market strength but acknowledged these limitations. “There’s nothing directly about quality or stability of a job market [in the ranking],” Zandi said.

“Some years are more volatile. Boom years are followed by years that don’t quite measure up. For most people, a market that is more stable is most desirable, and this analysis doesn’t account for that,” he said.

Raleigh, N.C., led the pack before the full 2006 data were available. (Forbes.com published a Best Cities For Jobs list in February.)

“They’re both strong economies and very solid job markets,” Zandi said of Salt Lake City, vs. Raleigh. “It’s Yankees-Red Sox. What’s the difference? There is no real fundamental reason why Salt Lake is now No. 1.”

New to the top 10 are Tulsa, Okla.; Albuquerque, N.M.; Wichita, Kan.; and Oklahoma City for income growth. Las Vegas just missed the top 10 by a spot but showed the second-best job growth. In 2005, it was ranked No. 48.

San Jose, Calif., posted the most significant jump, from No. 91 in 2005 to No. 14 in 2006. The third-largest city in the Golden State has the highest median household income, at $87,869. According to the data, that figure is projected to increase to $92,048 by the end of 2007 and $94,209 in 2008. However, it’s also the priciest city on the list in which to live.

Normally, one might expect the great metropolises of the U.S. to rank higher than they do. New York City, arguably the world’s financial capital, is listed at No. 63, a substantial change from its 99 ranking in 2005. Job growth overall is expected to increase along with job growth in the Big Apple.

San Francisco is at No. 31, up from 86, while Washington, D.C., fell to 32 from No. 5 in 2005.

Raleigh, however, remained among the five best in the job growth category. Phoenix reigned at No. 1, largely because of housing development. Given the recent housing bust, it will most certainly be dethroned in that category. The same goes for Florida — Orlando, Sarasota, Tampa and Fort Lauderdale won’t be so prominent for 2007 considering the impact of the downtrodden housing market. The next list will be “almost upside down,” Zandi said.

1.      Hire an Agent who can give your home or property constant exposure to prospective buyers 24 hours a day seven days a week. Next step is to:

2.      Clean the yard and garage of any debris, keep the lawn mowed and grounds looking tidy. Buyers will go by their first impressions as they drive up to your home. If they see you have “pride in ownership” they will be more inclined to offer you full price. Buyers usually offer hundreds or even thousands of dollars less for an “Un-kept” looking property or one in a run-down condition. You wouldn’t take a dirty car into a dealership and pay a high price for a dirty car full of junk, the same goes for your home. Buyers are more apt to buy the home that looks clean and shiny over one that shows it has had little care.

3.      Have the roof cleaned and repaint the exterior if needed. This can bring you many added dollars from a buyer. Buyers will pay more for a home if they don’t think they have to spend money on it right away for maintenance.

4.      Repaint interior walls white or very soft neutral crème-white if the walls are now colored bright or unusual colors. Prospective buyers will want to imagine their own belongings in the rooms…and sometimes be turned off by bright or inappropriate colors. Keep everything as “neutral” as possible.

5.      Organize your cupboards and closets. Have them looking neat and orderly.

6.      Have your windows sparkling clean, your floors or carpets cleaned and counter-tops free of clutter. Repair damaged vinyl or counter tops.

7.      Pack up everything you don’t need to use on a daily basis. You need to do it sooner or later, and doing it before you list will not only save you time later, but will allow the buyers to “mentally move-in” with their own belongings. You might even consider putting some furniture or other things into storage while the home is being marketed. Too much furniture or rooms filled with all your special “treasures” will make the rooms look smaller, and will distract the buyer. Remember, you want the buyers to be busy asking your Agent about the home, not admiring all your furniture and Knick-knacks. Keep the rooms “simple” and uncluttered. This is the time to “show off your home” not your “possessions”.

8.      Toss out any dead or dying plants and only keep a few nice ones in strategic places. Oh yes…NO DIRTY ASHTRAYS PLEASE!

9.      The easiest way to pack up your “extras” is go into each room one at a time, and take everything you can do without on a daily basis into the middle of the room, then pack it up and put it away or store it.

10.  Remove family photos from mantels, tables and walls. They can distract a buyer who might be more interested in looking at the family pictures than looking at the home.

11.  Next, go into the kitchen and make sure your oven is clean and remove all the small appliances from the counter tops. Store them under the counters for quick retrieval when needed. Cluttered counter tops make them appear to be smaller than they really are. Keep counters wiped and free of food and spatters. Empty garbage cans often and don’t allow them to have an odor that may turn a buyer off.

12.  DIRTY, SMELLY, KITTY-LITTER BOXES ARE A DEFINITE NO-NO!!!!Pet smells are a real deal killer! Buyers don’t want to have to smell unpleasant odors while viewing a home…they leave quickly and won’t stay long to look at the home if it smells like a kennel. Keep pets out of the way during showings. Big dogs frighten some buyers so bad that they won’t go near a home that has one locked inside. Place your family pet in an appropriate “safe-place” at all times and alert your agent to their presence. Posting your pet’s name somewhere that can easily be seen by your Agent can be helpful too, and less traumatic for your animal if they have a ’stranger’ in their house that can call them by name.

13.  Turn the lights ON in all the rooms just before a showing and leave the home during the showing whenever possible. Buyers sometimes ask sellers questions about personal matters that should not be discussed, trying to “feel you out” for possible price negotiation information. Your Agent knows what information the buyer should be given in order to realize the highest offer possible. If you are not present during the showings, this can be avoided. If you must be at the showing, don’t volunteer such things as: “Why you are selling”, “How long the home has been on the market”, or any other confidential information to a prospective buyer or his Agent during a showing. This kind of information can and will affect any offers you might get from the buyer.

14.  Consider using your “Listing Agent” as your “Buying Agent” when looking for a replacement home. He or she will know your wants, timing needs, and resources you have to work with better than anyone else. You should have a Professional Team working for YOUR BEST INTERESTS at all times. This should include your Attorney, your Accountant, your Banker, and most importantly your Realtor.

Laws vary widely from state to state. Do you know what kind of mortgage you have?

By Les Christie, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) — In Alabama, late-paying homeowners can lose their properties to foreclosure at breathtaking speed - as little as 30 days after a delinquency notice is published.

In New York State, the process can drag on for well more than a year.

With foreclosures spiking around the nation, homeowners should learn the foreclosure laws in their states - what you don’t know can hurt you.

“The foreclosure laws tend to be very parochial,” said Lawrence Jacobson, a real estate attorney in Los Angeles.

One major divide is whether the principal instrument securing the loan is a conventional mortgage or a “deed of trust.” They are not the same even though everybody uses the term “mortgage” interchangeably.

Foreclosures dip - but that won’t last

In fact, deeds of trust are the more common of the two, used in 34 states either mostly or exclusively.

The difference is this: Mortgages involve two parties, borrowers and lenders, while deeds of trust have third parties, called trustees, who hold temporary title to the properties until borrowers pay off their loans.

That difference can be crucial when a borrower falls behind in payments. With deeds of trust, the trustees don’t have to go to court to initiate a foreclosure; with a mortgage, the lender almost always does, which slows down the process.

In states where deeds of trust are an option, lenders almost always choose them over mortgages, because they are “non-judicial” - and quick.

California, where foreclosure might come as soon as 120 days following the delinquency notice, is one of them. Said Jacobson: “I’ve been a real estate attorney nearly 40 years and I have yet to see a mortgage in California.”

Bernanke: Subprime hit could top $100 billion

In many states, the process can be even quicker. At 30 days, Alabama may be the speed champ but other states with deeds of trust are not far behind. In New Hampshire, Mississippi and others, it takes as little as 60 days. All these states use deeds of trust.

(To see how long it generally takes in your home state, go to Foreclosures.com and click on a state.)

In contrast, judicial foreclosure, which is the usual procedure when a mortgage is involved, can be slow. First a lawsuit must be filed. Then, there’s a period of discovery and a court date must be set. And courts can grant delays to prepare cases. All told, it can take many months.

States with long time frames include Vermont (210 days), Florida and Nebraska (180 days). New York, at 12 to 19 months, is the state with the longest typical time frame.

Although home owners do lose their properties much quicker in most deed-in-trust states, they may enjoy one advantage: liberal “rights of redemption” are more common than in mortgage-only states.

That means even if your home is foreclosed on and auctioned off, there is a time period when you can pay the debt and get the home back.

The window is usually very brief, but can last for as long as a year after the property is sold at auction.

According to Alexis McGee, author of “The Foreclosures.com Guide to Making Huge Profits Investing in Pre-Foreclosures Without Selling Your Soul,” the right of redemption can be tough on foreclosure buyers. “The state gives the owner the right to buy back the property for the price [the auction bidder] paid for it,” McGee said. Any additional expenses buyers paid, such as for repairs or maintenance, is lost.

Foreclosures: Hardest hit zip codes.

One more wrinkle for home owners to note is that simply because they’ve lost their properties to foreclosure, it does not always mean they’re completely off the hook for their debts. If the auction sale brings less than the amount owed to the lender, it may still go after the borrower for the balance.

That’s called a “deficiency judgment,” and it’s a right that lenders do not enjoy in every state. As a practical matter, deficiency judgments rarely occur, but Jacobson knew of at least one case where it was invoked.

A couple owned a home that was totally destroyed in an earthquake. Its value to the lender fell to near zero and the owners had no insurance. The lender asked for a deficiency judgment - and won

Real estate speculators drove prices up in some of the hottest markets during the boom. Now they’re making foreclosures jump.

By Les Christie, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) — Flippers and other speculators investing in single-family homes helped drive up prices in many hot housing markets during the boom. Now they’re contributing heavily to mortgage delinquencies in several of those markets.

Defaults in non-owner occupied houses are driving defaults in four of the states with the fastest rising default rates in the nation, according to a report released Thursday by the Mortgage Bankers Association.

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Consumers shun adjustable-rate mortgages.

“Defaults are on the rise in most parts of the country, but…it is not always the case of a homeowner losing his or her home,” Doug Duncan, the MBA’s chief economist, said in a statement, “but [it’s] often the case of an investor gambling on a continued increase in home values and losing that gamble.”

Several sun-belt states were magnets for real estate speculators during the home-price boom. Coastal California led the early charge, but as prices there raced ahead of affordability, many investors abandoned those markets for Central Valley cities as well as Las Vegas, Phoenix and other Arizona towns.

Florida drew droves of investors from the Northeast, who spurred a rash of condo development in Miami, Ft. Lauderdale and other coastal towns. Single family home prices were also driven up in towns all over the Sunshine State.

Mortgage applications slip

As of June 30, in Nevada, 32 percent of all prime mortgages in default and 24 percent of subprime defaults were on non-owner occupied properties, according to the MBA. The numbers for Arizona were 26 percent prime and 18 percent subprime. In California, they were 21 percent and 15 percent respectively.

The default rates in Florida for non-owner occupied homes were 25 percent for prime loans and 14 percent for subprime ones.

In the rest of the nation, non-owners accounted for just 13 percent of prime loan defaults and 11 percent of subprime.

Foreclosure rescue scams

“California, Nevada, Arizona and Florida were among the states with the fastest home price appreciation over the last five years. This…attracted both speculators and home builders, a volatile combination that led to an over-supply of homes that was beyond the capacity of the local populations to support,” Duncan said.

“When this over-supply became apparent and prices began to fall, many of these investors simply walked away from their mortgages.”

In Nevada and Arizona, 29 percent of all the prime mortgage loans written in 2005 were for non-owner occupied home purchases. In California, it was 14 percent and in Florida, a whopping 32 percent, according to the MBA.

The subprime figures for non-owner occupied home purchases were 14 percent in Nevada and Arizona, 15 percent in Florida and 7 percent in California.

It might be a better choice to become a landlord while you ride out the housing slump.

By Kate Ashford, Money Magazine staff reporter

(MONEY Magazine) — When Katherine and Jean-Paul Chretien bought their Wheaton, Md. townhouse for $480,000 in late 2004, they expected to stay four or five years. But after daughter Jolie was born six months later, the home started to feel cramped. The Chretiens were ready to move out - but not quite ready to sell.

“Given realtor fees, we thought we’d only break even,” says Katherine, 32, an internist.

The Chretiens didn’t try to sell into a tough D.C.-area market. Instead they rented to Casey Haugner and Ryan Wrenn (in the window).

So when the couple, now expecting a second child, moved to a five-bedroom colonial less than two miles away this past winter, they didn’t put a “For Sale” sign out; they found a tenant. The Chretiens are banking on a downtown redevelopment project to boost property values.

“We have a lot of faith that the area is going to grow,” says Katherine. “We wanted to hold on to the home for a few years.”

The Chretiens have joined what could be, along with laid-off mortgage brokers, one of the fastest-growing populations in post-bubble America: the Accidental Landlord.

Like others of their kind, they didn’t set out to be property investors. But when faced with selling in a weakening market, they decided that renting was the better option. It’s certainly hard to argue with the math.

The inventory of homes for sale is twice as big as it was three years ago, which could mean a longer wait to sell - and a longer time to shoulder two mortgages if you buy your next home first. And with home prices flat - or worse - in many markets, you may not clear enough to cover broker fees once you do sell.

The rental market, on the other hand, is robust. Rents were up 4.1 percent in 2006, according to the National Association of Realtors.

The problem is, that’s not all there is to the math - and the math isn’t the whole story. Landlording is a job every step of the way, from setting a price to finding a renter. So before you take in tenants, make sure you understand all the implications.

When Renting Beats Selling

To make the rent-vs.-sell call, you need to know what your home could fetch today. Get a ballpark figure at a home-valuation site like Domania.com or, better yet, sit down with a realtor.

Be prepared: Her appraisal may fall far short of what you dreamed - especially if you hoped to get what the Joneses did when they sold in 2005. In that case you have two choices: Take what you can get (and maybe swallow a loss) or rent and hope to do better a few years later. Take the latter course if:

• You can charge enough in rent to cover your costs

You’ll need to suss out what typical rents are in your area and then compare that with your carrying costs. Those include not just mortgage payments, taxes and upkeep but also a bigger insurance tab: Your homeowners policy may go up if you don’t live in the house, and you’ll need additional liability insurance (for roughly $250 a year, you can get a $1 million umbrella policy).

Add on another 5 percent to 10 percent for unexpected maintenance or a gap between tenants. If you want to hire a property manager to handle paperwork and repairs, cut your projected rent by 10 percent.

• You have other funds for a down payment

If you have to rely on the equity you’ve built up in your current home to buy your next one, you’re probably not a candidate to rent.

You’d have to finance your down payment with a bridge loan or a home-equity loan or line of credit, which at today’s high interest rates would push up your carrying costs, making it even tougher to break even.

• You’re sure prices will rise

Becoming a landlord is a bet that you can earn more renting your home and selling later than you would by moving on and putting sale proceeds to work elsewhere.

How much rent you can charge is important, but so is what’s ahead for home prices (see forecasts for 100 top markets at cnnmoney.com/realestate). In fact, even if the rent doesn’t cover your out-of-pocket costs, a big turnaround in your market could make the numbers work.

• You’re not giving up a great tax break

If you rent for more than three years, you endanger a precious benefit of home ownership - the capital-gains tax exemption. Live in your house for two of the five years before you sell and you’ll pay no taxes on the first $250,000 in profits ($500,000 for a married couple).

But become a landlord for three years or longer and you’ll owe capital-gains taxes on all profits in your home since you bought it. That could wipe out more than a year’s worth of recovery in your market.

Are You Landlord Material?

Even if the numbers add up, you can’t assume you’ll thrive as a landlord. Take on the job only if:

• You can handle the risk

Your local housing market could stumble, your house could sit vacant for months or you could get stuck with a renter who doesn’t pay up.

If such unexpected bumps would deplete your savings, you’re probably better off staying out of the rental world.

• You have the time

Since you didn’t set out to be a landlord, you likely have a full-time job. If you have a responsible tenant, managing the property may not take much time. But even small tasks can crop up at inconvenient moments.

“It might only be 10 hours a month, but those 10 hours are not going to be when you want,” says Robert Irwin, author of The Landlord’s Troubleshooter.

Can’t stomach the idea of leaving your warm bed at 3 a.m. to meet a plumber? Then rethink your plan - or hire a property manager.

• You can bear some wear and tear

Just as not everyone is meant to be a landlord, not every house is meant to be rented.

“If your home has French windows, chandeliers or stuff that could easily be broken, it may not be the best one to rent,” says Irwin.

A house with lots of bedrooms will likely attract families with kids - and the damage they inflict. Get used to the idea that not everyone will care for your home the way you do.

Building Your Team

Once you decide to rent, you’ll need backup. If the roof leaks when you’re on vacation, do you want your tenant shopping for a handyman? Before anything breaks, put the numbers of a reputable and reasonable plumber, handyman, electrician, roofer and contractor on speed dial.

Find an accountant who knows real estate. Standard leases vary by state and sometimes even city, so hire an attorney to draft one, or start with a state- or city-specific document from CompleteLandlord.com (about $15).

If all goes well, you may even become a Deliberate Landlord. After renting out her old home in Denver when she moved, Wendy Muller is contemplating that step.

“It’s been a wonderful investment,” she says. “We’re going to sell it soon and buy two more properties”.

QUESTION

Can my loan be sold? What happens if my lender goes out of business?

ANSWER

Your loan can be sold at any time. There is a secondary mortgage market in which lenders frequently buy and sell pools of mortgages. This secondary mortgage market results in lower rates for consumers. A lender buying your loan assumes all terms and conditions of the original loan. As a result, the only thing that changes when a loan is sold is to whom you mail your payment. If your loan has been sold, your existing lender will notify you that your loan has been sold, who your new lender is, and where you should send your payments from now on.

If your lender goes out of business, you are still obligated to make payments! Typically, loans owned by a lender going out of business are sold to another lender. The lender purchasing your loan is obligated to honor the terms and conditions of the original loan. Therefore, if your lender goes out of business, it makes little difference with regards to your loan payments. In some cases, there may be a gap between the date of your lender’s going out of business and the date that a new lender purchases your loan. In such a situation, continue making payments to your old lender until you are asked to make payments to your new lender.

$50 Billion Worth of Mortgage Resets on October 1?!

David Bach, The Automatic Millionaire over at finance.yahoo.com wrote an article entitled “Making Mortgage Relief Work for You” on Monday, September 10, 2007. He begins his article in this way:

“On Aug. 31, while many of us were getting ready for a long holiday weekend, President Bush addressed the nation about the mounting concerns in the housing market. His speech took place exactly one month before we’ll see a record-breaking $50 billion in mortgages reset to a new rate.

“That’s right, in the month of October alone, many homeowners will be forced to pay higher monthly mortgage payments than they can reasonably afford. And while this number is staggering, it’s not exactly new information — it’s been known for two years that the crisis was coming.

So once again I’m left befuddled. In approximately two weeks, homeowners of all stripes with adjustable rate mortgages (interest only mortgages, subprime borrowers and those homeowners with weak credit and no cash reserves) will be forced to pony up more cash to keep a roof over their collective heads. We are talking about mortgages that are barely affordable to these borrowers at the margin and the specific mortgage amounts will be going up based on what the Federal Reserve sets the rate at in one week, on September 18, 2007 A.D.

So, if the Fed adjusts the prime rate significantly lower (.50 to .75 basis points), then these households that are struggling with budgetary concerns will have just a hint of fiscal breathing room. If the Fed does nothing to the prime rate, then the stock market will go in the tank which will cause more individuals lose their jobs while their adjustable rate mortgages will reset beyond their budgetary abilities to make the monthly payments. I don’t even have to tell you what will happen if the Fed raises the prime rate (which is unlikely but still one of three options)!

$50 billion in mortgages resetting in approximate two weeks is no small number! If you are a homeowner who wants to get out of your home as quickly as possible because your mortgage loan was financed with an adjustable rate mortgage, perhaps you should consider putting a nice-looking sign in the front yard that says “Owner Will Finance”. It’s far better to sell your home quickly and save what is left of your credit rating than it is to be one of thousands in your community with homes will be foreclosed upon as unaffordable to the previous owner. Cut your losses now, owner finance!

InvestorInsight has an interesting chart of the amount of adjustable rate mortgage resets that will be happening over the next year or so. While we think that there have been an incredible amount of mortgage resets in the past few months the real bubble will be occurring starting in January of 2008. For the period of January to April expectations are that 370 million in adjustable rate loans will reset.

Now in reality, most of these loans will be refinanced or kept up to date, but if the credit situation does not get figured out, there are going to many households that are going to be stressed.

Adjustable Rate Loan Resets For 2007–2008

Month           Millions
January-07      22
February-07     25
March-07        35
April-07        37
May-07          36
June-07         42
July-07         43
August-07       52
September-07    58
October-07      55
November-07     52
December-07     58
January-08      80
February-08     88
March-08        110
April-08        92
May-08          76
June-08         75
July-08         50
August-08       35
September-08    26
October-08      20
November-08     15
December-08     17

Mortgage resets: Record bill coming due

Billions in subprime ARMs will be subject to higher payments.

By Les Christie, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) — More than two million subprime adjustable rate mortgages (ARMs) are poised to reset at much higher rates in coming months, worsening an already suffering housing market.

Borrowers who took out hybrid ARMs in 2004 and 2005 to secure low “teaser” rates for the first two or three years of the loan may see their monthly mortgage payments climb by 35 percent or more.

Consumer groups and politicians worry that hundreds of thousands of subprime ARM borrowers will be unable to keep up with their mortgage payments and will lose their homes.

“In October alone more than $50 billion in ARMs will reset,” according to Mark Zandi, chief economist and co-founder of Moody’s Economy.com. That’s a record, according to Zandi.

Foreclosures: Hardest hit zip codes

A buyer in 2005 with poor credit and limited means might have signed on for a $200,000 2/28 hybrid ARM, locking in a fixed rate of 4 percent for two years. After paying $955 a month, the bill would now be set to spike to $1,331, a 39 percent increase.

Until recently, rising home prices bailed out many ARM borrowers in trouble. They could raise cash with cash-out refinancings or home equity lines of credit. If worse came to worse, they could sell the house and get some money back.

But prices have stabilized or slipped in many markets. (Latest home prices.)

As a result, Doug Duncan, chief economist for the Mortgage Bankers Association (MBA), is expecting as many as 600,000 home owners will get into trouble with perhaps half of them actually losing their homes.

One of the reasons for the worsening situation, according to Zandi, is that just as the number of subprime ARMs being underwritten was reaching a high, the quality of loans was hitting new lows.

“There were increasingly poor quality loans made starting in the spring of 2005,” he said, “with the poorest of all made during the fall of 2006.”

Lenders approved many borrowers who had little chance of being able to afford the payments two and three years out. They approved applications without any proof of income or assets (”liar loans”) and others that barely could make the low teaser-rate payments. Some borrowers chose interest-only ARMs, which left the principal of the loan untouched. Regulators are urging tighter standards.

“Lenders wanted to keep the pipeline flowing,” said Zandi, “and were hopeful that prices would grow again.”

The hardest hit areas will fall into two categories, according to Duncan. The regions battered by basic economic storms - think Detroit, Cleveland, St. Louis and other old industrial centers - and high-growth areas where home markets went crazy earlier in the 2000s and where home prices are now falling

Subprime ARM lending was most common in some of those once red-hot areas. According to Zandi, three quarters of all those loans were made in the California, Nevada, Arizona, Florida and Massachusetts markets.

“Prices there are falling quickly, particularly in Florida and Las Vegas,” he said. (Florida foreclosures are set to spike.)

There will be more downward pressure on prices as delinquencies, foreclosures and short sales add inventory to markets.

Another factor is that regulators and lenders are attempting to tighten loan underwriting standards, meaning fewer credit-damaged applicants will get approved, lowering demand for homes.

The tightening mortgage-loan standards could also result in short-term foreclosure spikes. Home owners with resetting ARMs, for example, may not qualify for refinancing under the stricter oversight. That could lock borrowers into unaffordable loans and they could lose their homes.

Another increase in supply, according to Josh Rosner, managing director at financial research firm Graham Fisher & Co, will be from investment properties coming back on the market. There was a precipitous burst of buying homes for investment purposes earlier in the decade. In 2005, about 40 percent of all purchases were of second homes and the majority of these were for investment purposes.

As returns on these investment properties decline, owners will bail out, increasing the listing backlog and depressing prices further. The effect of a foreclosure rise and home price slide on the nation’s economy may be hard to predict but it will have an impact.