Well CV, I am not sure that foreclosing quickly part is or ever was part of the plan. If institutionalized foreclosures would have happened en masse then those institutions would not have been able to manipulate the books as easily as if the assets were simply not performing. Once that foreclosure is done then financially it is a different ballgame.
Incompetence yes! I will agree with you on that end but you have to make sure you have your targets correct. I think the incompetence level in the liquidation groups that handle the short sales is nothing short of incredible. However when it comes to foreclosing, the beneficiary does not foreclose nor does the servicing entity, it is the trustee that is responsible for that. Of course they can be cancelled or even postponed by the bene. Also if you look back the political outcry from both the state and federal levels was considerable. Recall the various moratoriums put in place and as you brought up the loan mods and all that other fun, (which is still going on).
I would agree with you that the show is not over by a longshot. We have a hell of alot of inventory to chew through and plenty of deadbeats still in homes. It will literally take years to push this lump through the belly of the snake. I am not as concerned about housing starts as I am about interest rates. I think builders are pretty damn smart and will be able to price to sell as they are good at looking ahead. Inventory wise it will have an effect pricing the REO properties but they will get slurped up. Once they hit investment level pricing you will see them get bought.
Stability in rates is questionable at best and to me there is a fantastic drag race going on right now. That is, can the inventory get sold off before the dollar plummets dramatically and rates respond bigtime. I do agree, it will be a tightrope act. If they can keep a lid on rates for another 2 years I think they will be in pretty good shape. I am sure we will be discussing this plenty!
