Sandiegobanker – Fascinating post! Can you explain further? Did you see the effect on the MBS market? How many banks were taken down by this? Was there any discussion of the gov’t stepping in to make the banks solvent? Why have people forgotten what happened just a decade ago, and repeated the same mistakes?

Although the internet can compact the price decline, the number of RE investors and newly minted foreclosure investors (from seminars and books) has increased the number of people who come to RE auctions. Perhaps that will keep up the REO auction price, as more bidders show up. For example, the SDCty Tax Collector had their annual auction and rented a larger hall (although the number of auction properties increased only by 10 houses from 70 last year to 80 this year), just to accomodate a larger group. Do you think there could be more bidders, thus preventing the REO auction price from falling as low as last time?