I think Jim Cramer is right about thing, that a lot of people will just walk awy from their homes. Why struggle to make a payment after it readjusts when you realize you are 20% to 30% in the hole. I ahe seen it before, they just mail the keys to the bank and rent for a few years.
But the clever Russkies have a new scam going in Californicated. They have an Ivan (or a Jose!) move into a vacant house listed for sale by some stupid, failed house flipper. Then the Ivan files homestead papers on the home.
When the bank starts foreclosure title reviews, they discover there is a new homestead filing. They cannot complete the process without contacting the person who filed. The Ivan demands a cash payoff. Tantamount to kidnapping the house and holding it for ransom. Demands of $ 10,000 or $ 20,000 are common.
The banks pay the Ivan rather than getting into an expensive legal fight. The Russkie moves down the road into another vacant house. Very clever scam.
The Russkies are all over the housing bubble and credit bubble. Making millions. Laundering illegal drug profits. Building houses using stolen credit cards to purchase materials. Shilling for realtors and mortgage brokers. Million have been stolen from innocent victims.
Open borders. FBI asleep. Homeland security asleep. Bush is talking about giving more millions to corrupt Mexican officials to police the drug trade. Shesssh!