‘We’re in the Middle of a Crash’: Black Swan

[ucodegen]

@XboxBoy

You missed one of the choices of the bank in dealing with the delinquent home ‘owner’.. the forth is to take the property in foreclosure and then lease/rent it back to the previous ‘owner’ they foreclosed on. The bank then takes the lease payments and applies them to the banks cost of capital for the money the bank borrowed to finance the mortgage in the first place. This gives the banks time for/to:

1) find a better tenant.
2) sell the property when real estate prices have stabilized.

Admittedly, #2 has risks, but it may be better to the bank instead of flooding the market with foreclosed properties. All they time that the banks are waiting for the prices to stabilize/inventory to decrease, they are getting ‘rental’ payments on the property.

[peterb]

I will say one thing in support of TPTB….if this all happened at once, the system could collapse.

If 25% of the mortgages in SD county are upside down at ths time, and if unemployment persists, I could see this being a slow grind down, punctuated by times of extreme drops during the RE “off season” for several more years.

[peterb]

I will say one thing in support of TPTB….if this all happened at once, the system could collapse.

If 25% of the mortgages in SD county are upside down at ths time, and if unemployment persists, I could see this being a slow grind down, punctuated by times of extreme drops during the RE “off season” for several more years.

[peterb]

I will say one thing in support of TPTB….if this all happened at once, the system could collapse.

If 25% of the mortgages in SD county are upside down at ths time, and if unemployment persists, I could see this being a slow grind down, punctuated by times of extreme drops during the RE “off season” for several more years.

[peterb]

I will say one thing in support of TPTB….if this all happened at once, the system could collapse.

If 25% of the mortgages in SD county are upside down at ths time, and if unemployment persists, I could see this being a slow grind down, punctuated by times of extreme drops during the RE “off season” for several more years.

[peterb]

I will say one thing in support of TPTB….if this all happened at once, the system could collapse.

If 25% of the mortgages in SD county are upside down at ths time, and if unemployment persists, I could see this being a slow grind down, punctuated by times of extreme drops during the RE “off season” for several more years.

[patientrenter]

I think collapse could be avoided using simple govt guarantees of bank deposits, debts, and bank counterparty guarantees. What these guys are trying to avoid is the restructuring pain. It cannot be avoided, only passed on to others. There’s no need for us (i.e. the others) to accept that, if we were smart enough to see what was happening.

[patientrenter]

I think collapse could be avoided using simple govt guarantees of bank deposits, debts, and bank counterparty guarantees. What these guys are trying to avoid is the restructuring pain. It cannot be avoided, only passed on to others. There’s no need for us (i.e. the others) to accept that, if we were smart enough to see what was happening.

[patientrenter]

I think collapse could be avoided using simple govt guarantees of bank deposits, debts, and bank counterparty guarantees. What these guys are trying to avoid is the restructuring pain. It cannot be avoided, only passed on to others. There’s no need for us (i.e. the others) to accept that, if we were smart enough to see what was happening.

[patientrenter]

I think collapse could be avoided using simple govt guarantees of bank deposits, debts, and bank counterparty guarantees. What these guys are trying to avoid is the restructuring pain. It cannot be avoided, only passed on to others. There’s no need for us (i.e. the others) to accept that, if we were smart enough to see what was happening.

[patientrenter]

I think collapse could be avoided using simple govt guarantees of bank deposits, debts, and bank counterparty guarantees. What these guys are trying to avoid is the restructuring pain. It cannot be avoided, only passed on to others. There’s no need for us (i.e. the others) to accept that, if we were smart enough to see what was happening.

[XBoxBoy]

[quote=ucodegen]XboxBoy,
You missed one of the choices of the bank in dealing with the delinquent home ‘owner’.. the forth is to take the property in foreclosure and then lease/rent it back to the previous ‘owner’ they foreclosed on. [/quote]

Hey, I have no problem with that if the bank wants to do that. But isn’t that still a foreclosure? (Which would be number one of the three options) What the bank wants to do with the place after they foreclose is up to them.

I do see two problems with this though.
1) Banks are not equipped nor do they want to become property managers.
2) Most people aren’t going to want to rent the house they were just foreclosed on for various psychological reasons.

I would think that most people who make it to foreclosure auction just want forget the whole mess. Okay, some want to stay rent free until they get evicted or get cash for keys, but I doubt many will want to pay rent to stay in a place that daily reminds them of their failed financial endeavour. Just my guess though.

XBoxBoy

[XBoxBoy]

[quote=ucodegen]XboxBoy,
You missed one of the choices of the bank in dealing with the delinquent home ‘owner’.. the forth is to take the property in foreclosure and then lease/rent it back to the previous ‘owner’ they foreclosed on. [/quote]

Hey, I have no problem with that if the bank wants to do that. But isn’t that still a foreclosure? (Which would be number one of the three options) What the bank wants to do with the place after they foreclose is up to them.

I do see two problems with this though.
1) Banks are not equipped nor do they want to become property managers.
2) Most people aren’t going to want to rent the house they were just foreclosed on for various psychological reasons.

I would think that most people who make it to foreclosure auction just want forget the whole mess. Okay, some want to stay rent free until they get evicted or get cash for keys, but I doubt many will want to pay rent to stay in a place that daily reminds them of their failed financial endeavour. Just my guess though.

XBoxBoy

[XBoxBoy]

[quote=ucodegen]XboxBoy,
You missed one of the choices of the bank in dealing with the delinquent home ‘owner’.. the forth is to take the property in foreclosure and then lease/rent it back to the previous ‘owner’ they foreclosed on. [/quote]

Hey, I have no problem with that if the bank wants to do that. But isn’t that still a foreclosure? (Which would be number one of the three options) What the bank wants to do with the place after they foreclose is up to them.

I do see two problems with this though.
1) Banks are not equipped nor do they want to become property managers.
2) Most people aren’t going to want to rent the house they were just foreclosed on for various psychological reasons.

I would think that most people who make it to foreclosure auction just want forget the whole mess. Okay, some want to stay rent free until they get evicted or get cash for keys, but I doubt many will want to pay rent to stay in a place that daily reminds them of their failed financial endeavour. Just my guess though.

XBoxBoy

[XBoxBoy]

[quote=ucodegen]XboxBoy,
You missed one of the choices of the bank in dealing with the delinquent home ‘owner’.. the forth is to take the property in foreclosure and then lease/rent it back to the previous ‘owner’ they foreclosed on. [/quote]

Hey, I have no problem with that if the bank wants to do that. But isn’t that still a foreclosure? (Which would be number one of the three options) What the bank wants to do with the place after they foreclose is up to them.

I do see two problems with this though.
1) Banks are not equipped nor do they want to become property managers.
2) Most people aren’t going to want to rent the house they were just foreclosed on for various psychological reasons.

I would think that most people who make it to foreclosure auction just want forget the whole mess. Okay, some want to stay rent free until they get evicted or get cash for keys, but I doubt many will want to pay rent to stay in a place that daily reminds them of their failed financial endeavour. Just my guess though.

XBoxBoy

[Author]

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