Rustico: I would think that as we approach year end, there will be some pressure on the banks to clear REO properties off the books.
Non-performing assets generally create a fair amount of drag on the financial statements (speaking as an accountant now) and, given the amount of foreclosures out there right now, I have to believe we are talking about a significant amount of inventory.
I spoke with a friend who is in banking and he told me that there is a huge amount of concern throughout banking in SoCal about the amount of houses that have gone back to the banks. He also said that beyond that, there was the fear at what a wholesale “dump” of REO properties would do to pricing and values.
