I am not saying I disagree with the analysis but I do want to add my concerns. For one thing, why hold the asset, why not dribble them or at least get rid of a them a few at a time. Why would lenders hold ALL of them when they will be acquiring more and more of them at a faster rate?
Also by holding them then who is paying the interest on the bonds that have been issued?
We also saw that large auction in May where “supposedly” some of the properties did go at pretty low prices. Although I am not so sure if that indeed is true.
So… yeah nsr I “think” you are right… but I still think that the lenders would indeed start to try to move a small fraction of the properties while holding most of them…
UNLESS
Now to patient renters point. I have always been stressing out about what you brought up… the sheer size of the parties who DONT want the housing market to crash. Think about it, all the lenders, the banks, Wall Street, the federal government…. the sheer amount of power and money that has a vested interest in propping up the market or at least forstalling the crash and making it a prolonged stall over many years… this is what has always worried me the most. Patient renter your example was just one way that it could happen…kind of an indirect bailout by FNMA…
Now I don’t want to get political (aka known as the knell for any Realtor) but tell me how happy Hillary would be to promise to save all those poor middle class homeowners who are about to lose their homes. Are you kidding me? (don’t confuse that statement for an endorsement of the current administration because it is not) It is just an example.
Sorry for rambling… there is just alot of money and power that I am sure will be lobbied to try to prop things up.
