Interesting that you mention price cuts stopping suddenly. I too recall that there were price cuts daily on some of the 100-200 properties I was following in OC until some time in January. Just as you say, they all stopped at about the same time – within a few days.
I get irritated when I read paranoid rantings about a cabal of hedge funds or IB’s or whatever manipulating markets behind the scenes. But it is hard to see how dozens of managers responsible for REOs in OC all of a sudden, all independently, woke up one morning and decided that their weekly/monthly price reduction pattern of the prior 6 months was the wrong thing from that point forward.
I am now a little more open to the theory that, even when it comes to deciding local pricing of REOs, there may be govt.-backed collusion and manipulation. I can just see the local FDIC guy, with directions from further up, getting everyone who services OC loans into a room and telling them that they’d better do X, or else. Or maybe the banks just got together on their own, knowing no govt agency would take action against them now for propping up house prices, even if it violated all sorts of rules against competition restraints.
