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The worst of the residential real estate foreclosure crisis has passed...

The worst of  the residential real estate foreclosure crisis has passed...for now. Subprime foreclosures appear to have crested and the pundits are chirping like the first robins of spring. Don't be deceived. There's another wave coming: Option ARM's. The Option ARM re-sets will begin to rise next year and peak in 2011.

Here is a clip in which Professor William Black discusses the problem. Black says the crisis is serious but thinks it can be solved  by action at the consumer level, but that won't be solved because we're doing the wrong thing (which is pouring more money into large banks that aren't lending.)

Martin Weiss of Money and Markets has also warned of the Option ARM crisis.

Investment sentiment: Rates are down, sales are edging up. Might be a nice time to unload that vacation home.

Beware Crisis' Next Wave: Option ARM Foreclosures, More Debt Defaults