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Strange things I consider on a regular basis

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xmtpedprl

Senior Member
Joined
Dec 6, 2005
Professional Status
General Public
State
Florida
Hi,

Have you ever considered the plight of being lost on a boat in a salt water sea/ocean? Your water supply eventually runs out, you're alone on your boat, clock's ticking, and eventually you're going to get thirsty. However, the moment you take a drink of that water, boom, you need more water, but it's salty, so you get the picture. Nasty dilemma.

So, I was thinking about banks/lenders, all their foreclosures, and, salt water.

You see, it seems to me that if these gate keepers continue to collect all these foreclosures they have, oh, like about 3 choices:

1. REO some of them
2. Short Sale some of them
3. Auction some of them

(Feel free to inform me if you feel I've missed an option.)

And as I was thinking about this, and in light of considering certain states with overwhelming amounts of this kind of activity - with more demonstrating clear evidence they're on the same path - I was thinking, would I be wrong in considering the predicament of the banks/lenders actually becoming THE market, rather than a majority of what we might grant as 'conventional' sale efforts?

And if you'll grant me that, if the banks/lenders become the dominant sale of property inventory, well, wouldn't it also then become true that by default they will (literally) "choke themselves out" (I am an ex-fighter, excuse the clumsy metaphor) due to each sale being lower than the next sale, thus creating a vortex that only they, themselves, will eventually be able to stop..?

(I'm leaving out some detail here, but it's late, I am tired, and you'll have to fill in a few blanks.)

Okay, if I am even remotely correct, then wouldn't it be also safe to predict that if these genius banks/lenders in control of their own vortex of doom don't get together and figure out how to cease the downward spiral they've now created (and will continue to feed) that we'll soon need a "Rooseveltian 'New Deal'" the likes of which hasn't been seen in most anyone here's lifespan..?

I realize this is only a partial thought, but I tend to think conceptually, so if anyone has an opinion on this thought, please, let me know of it, because as as of last Saturday when this idea became clear to me I must admit I (more or less) was stunned by the possibility.

I think we're about to enter into a period of financial panic unlike that which has yet to have been publicly stated and acknowledged, and unless a clear cut solution, unless critical leadership kicks in, there is going to be what is commonly known as, "Hell to pay," and it will begin to reach critical mass before Winter of this year. And it will be beyond the average American property owner's control.

Methinks these banks/lenders are swimming & drinking in a salt water of their own creation right now, and I do not foresee any relief coming unless they have a stash hiding somewhere unbeknownst to us.

Your thoughts are welcome.

Dave...
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
Many of the lending practices of easy money fueled the bubble, yes it helped create the mess, and now that the sh*t has hit the fan, the current lending policies are making the crash much worse.

The crash of 29 was because way too many investors were borrowing on the margin, with other peoples money. The current crash is because way to many homeowners borrowed beyond their means, deja vu all over again...
 

xmtpedprl

Senior Member
Joined
Dec 6, 2005
Professional Status
General Public
State
Florida
I dunno if it's like 1929, as the Fed wasn't giving those guys $75,000,000,000 to stay afloat while the recipients, themselves, were busy simultaneously devaluing their own portfolios by selling their holdings at half what the market would be paying if they weren't busy pressing the panic button.

There's a Black Sabbath jam called 'Killing Yourself to Live' (yes, in my youth I was a metalhead band kinda guy), and it seems to me that as they continue to sell off all their reclaimed properties they are at the same time devaluing their own portfolios, hence the song reference.

They are now killing themselves to live, which is, obviously, as suicidal as it is contradictory. It's an 'Existential' kinda argument probably best left to philosophers much smarter than myself, however, I am unfortunetely caught up in the act of thought at the moment.

Dave...
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Study the Real Estate market of 1927 .... that might scare you a bit .... 1929 could only be a year or so away ....
 

Michigan CG

Moderator
Staff member
Moderator
Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
Dave, the Chicago Market is relatively healthy compared to other areas. Imagine the doom and gloom you would see if you worked in the other market areas.
 

xmtpedprl

Senior Member
Joined
Dec 6, 2005
Professional Status
General Public
State
Florida
That's not fair, don't advise studying that time so quickly and passively. Give us some bullet points, tell us why that time is anything remotely like this time. Tell us how much cash was infused into the perpetrators of the problem in an effort to SOLVE the problem. Tell us what the proportional relationship is.

See, I don't think it's the same, I think it's quite different, and will require a considerably different solution. I think the very people needing the help are going to continue to cause the problem, hence any infusion of cash is meaningless, or, at the very best, wishful (and temporary) good will.

Dave...
 

xmtpedprl

Senior Member
Joined
Dec 6, 2005
Professional Status
General Public
State
Florida
Tim,

No sir, it's not, it's cancerous, it's just not public knowledge yet. We're dying, and the speed at which we're visibly showing signs of sickness are accelerating.

Also, I don't have to imagine, I'm in several states, thus considerably more involved than most.

Dave...
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
If you drink the salt water you'll go crazy. You have to have a solar
still if you want to survive. Really good book on the subject,
Adrift: Seventy-six Days Lost at Sea by Steven Callahan. One
of Callahan's lesson was, "Don't assume anyone will see you just
because you shoot a flare."

Also, panic doesn't accomplish anything. The Fed rate is at 2%, after
9/11 it went to 1%. That's pretty liquid.
 

lostinthezone

Sophomore Member
Joined
Mar 2, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
Did an appraisal today where in the subject zip code there were 114 active listings and 16 sales in the last six months. Over half of those sales were REO properties. However, there were about 14 properties that had contracted in the last 2-3 weeks. It might get worse before it gets better, but that seems like a good sign....
 

Alison Swain

Senior Member
Joined
Sep 13, 2005
Professional Status
Certified Residential Appraiser
State
Florida
Hi,

I do not foresee any relief coming unless they have a stash hiding somewhere unbeknownst to us.

Your thoughts are welcome.

Dave...

Dave........(perfect!):

I had an unbeknownst stash once. It was hidden in a little heart-shaped box on my coffee table. I had forgotten about it from months before when I had cleaned up my act and got better friends. I foresaw much relief as I cleaned up prior to a visit from Mom. :new_llying:


:rof::rof::rof:
 
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