This is what pisses me off more than anything. The fed is cutting interest rates so the banks can borrow money more cheaply, while they are already sitting on billions of dollars of RE assets.
If they need liquidity they should get it the old fashioned way, via liquidation of assets.
However, they are in the unenviable position that each foreclosure sale is going to lower the comps for all the other REO’s in the area. A real classic Catch-22.
The thing is, though, they *have* to get rid of them at some point in time. They can’t carry non-performing assets forever. Which is why I’ve been saying for awhile that the worst is yet to come.
The banks don’t have anybody by the huevos, if anything the FB’s are calling the shots now. They can threaten bankruptcy, sue for predatory lending or just stop paying and wait for the bank to evict them.
