Guidant Financial Group Blog

WARNING: More doom and gloom in this posting.

According to CNNMoney.com, more prime borrowers are defaulting on their mortgages (see The Next Wave of Mortgage Defaults).

Not good.

Experts believe that the initial wave of foreclosures started a vicious cycle of delinquencies begetting delinquencies. "It's a feedback loop," chief economist for the National Association of Realtors, Lawrence Yun, told CNNMoney. "Price declines lead to more defaults, which leads to more price declines."

While this does mean that it may be even longer than expected for the housing market to recover, it also means that foreclosures and related investment opportunities may continue to be available to self-directed IRA investors.

We like to believe that, even though the contribution may be relatively small, those aggressively utilizing their self-directed IRAs to make the most of a bad situation are helping to bring the vicious cycle to a stop.