It’s deeper than that. It’s better to keep the condos on the books than sell them. If they sell, they loose that over-valued loan, that they are under-water on.
For Example: Builder takes a loan out to start an oc condo project in 1995. Huge dollars. Let’s say 200 Million. Easy loan back then. Builder makes monthly payments till project is finish and sold at which time he pays off loan. lol, Market crash. If he sales condos now he’ll only make 100 million, tops. He still owes the bank 100 million. lol.
They are going to go bankrupt no matter what. They are crossing their fingers and holding on for dear life. The housing market wont pick up next week, nor next month, nor next year, or even the year after that.
