The Next Phase

clipped from blogs.moneycentral.msn.com Although Wall Street's focus has turned to other matters, the housing crisis continues to smolder and burn like an abandoned campfire ready to reignite. Heck, the banks are even restarting the mortgage repackaging business -- once again turning questionable loans into "investment grade" securities. But just as we look the other way, the next phase of the housing crisis is about to begin according to new analysis by hedge fund owner and value-investing guru Whitney Tilson. In a recent update to his housing overview from last December, Tilson says the next phase will be driven by prime and Alt-A borrowers who owe more than their house is now worth. The catalyst will be ongoing job loss, falling wages, and rising interest rates. Add to this a huge wave of Alt-A loan resets over the next five years. The result: Home prices will fall another 10%, possibly more. As for the hope that first-time buyers will swoop in and save the day, just look at the chart above.