[quote=patientrenter]I won’t attempt to steal SDR’s thunder, but I think PPIP is a taste of what’s to come. If banks can’t sell REOs at inflated prices on the open market, then govt subsidies will be created to allow them to sell to some investors at inflated prices. It’s the PPIP model for MBSs translated to REOs.[/quote]
Forgive my lack of knowledge here. The PPIP needs to do something w/the properties, wouldn’t they? Are they going to rent them all? If they attempt to sell and can’t get an inflated price, they can sell for less, b/c aren’t the taxpayers footing the bill if they have a loss?
I thought the PPIP also has little skin in the game. Aren’t we just pretty much still just playing hot potato. Tag! the PPIP are it and not the banks. Now they get to deal w/it and if they make money, cool. If not, the taxpayers got you covered.
And in this market, w/tightening credit still in effect, they might be a little challenged selling high. They may have to take a loss, b/c it won’t really be a loss b/c aren’t they covered?
Maybe I have it all wrong. It’s a little complicated for me to understand it all. Trying to make sense of it.
