short sale tale

[SK in CV]

Asset managers is stupid.

It has pretty much always been this way. If they acted rationally, they would minimize losses. They don’t. They spend enormous amounts of time (and money) in valuing assets, then make decisions which seemingly ignore that valuation, and choose an option which increases their losses. I watched it happen during the downturn in the early 80’s, again in the early 90’s, and once more during the current crash. It is systemic stupidity.

(In fairness to asset managers, it may in fact be management. I was part of the management team for the court ordered liquidation of a $250 million hard money lender portfolio in the early 90’s, and we employed some very competent asset managers that had big bank experience. They provided detailed evaulations of every asset but it was always management’s decision to pull the trigger on a deal. I have no idea what level of management pulls the trigger for big bank distressed asset departments. Whoever it is, they do a crappy job.)

[Anonymous]

I turn to think the underline reason of the seemingly stupid decisions is the result of the recent accounting rule change, which allows banks to use non-realistic valuation for the assets they hold. Banks pushed congress for the change and achieved their intended consequences, i.e. they can now hold bad assets as they were good assets. As such, they would rather hold onto those assets, so their books look better than they are actually are. Short sale will realize the loss and their books will look worse. Same for the pace of foreclosures, they have no urgency to get the loans off the books, instead they like them to stay in, so they do not have to look for new capitals.

[Anonymous]

I turn to think the underline reason of the seemingly stupid decisions is the result of the recent accounting rule change, which allows banks to use non-realistic valuation for the assets they hold. Banks pushed congress for the change and achieved their intended consequences, i.e. they can now hold bad assets as they were good assets. As such, they would rather hold onto those assets, so their books look better than they are actually are. Short sale will realize the loss and their books will look worse. Same for the pace of foreclosures, they have no urgency to get the loans off the books, instead they like them to stay in, so they do not have to look for new capitals.

[Anonymous]

I turn to think the underline reason of the seemingly stupid decisions is the result of the recent accounting rule change, which allows banks to use non-realistic valuation for the assets they hold. Banks pushed congress for the change and achieved their intended consequences, i.e. they can now hold bad assets as they were good assets. As such, they would rather hold onto those assets, so their books look better than they are actually are. Short sale will realize the loss and their books will look worse. Same for the pace of foreclosures, they have no urgency to get the loans off the books, instead they like them to stay in, so they do not have to look for new capitals.

[Anonymous]

I turn to think the underline reason of the seemingly stupid decisions is the result of the recent accounting rule change, which allows banks to use non-realistic valuation for the assets they hold. Banks pushed congress for the change and achieved their intended consequences, i.e. they can now hold bad assets as they were good assets. As such, they would rather hold onto those assets, so their books look better than they are actually are. Short sale will realize the loss and their books will look worse. Same for the pace of foreclosures, they have no urgency to get the loans off the books, instead they like them to stay in, so they do not have to look for new capitals.

[Anonymous]

I turn to think the underline reason of the seemingly stupid decisions is the result of the recent accounting rule change, which allows banks to use non-realistic valuation for the assets they hold. Banks pushed congress for the change and achieved their intended consequences, i.e. they can now hold bad assets as they were good assets. As such, they would rather hold onto those assets, so their books look better than they are actually are. Short sale will realize the loss and their books will look worse. Same for the pace of foreclosures, they have no urgency to get the loans off the books, instead they like them to stay in, so they do not have to look for new capitals.

[UCGal]

It doesn’t surprise me that banks aren’t acting in their own best interest… they didn’t on the way up, either.

May I ask an impertinant question? If the home had kept its value would you be staying in the home? Are you going through foreclosure because the home lost value, even though you still have the means to pay the mortgage you obtained?

I have friends who are pursueing a short sale – but in their case they lost one of the two household jobs. They are going back to renting a smaller place to live within their downsized budget. It sounds, from your tale, that they may stand a better chance of getting the short sale approved since they have a documented “distress” with the job loss.

[UCGal]

It doesn’t surprise me that banks aren’t acting in their own best interest… they didn’t on the way up, either.

May I ask an impertinant question? If the home had kept its value would you be staying in the home? Are you going through foreclosure because the home lost value, even though you still have the means to pay the mortgage you obtained?

I have friends who are pursueing a short sale – but in their case they lost one of the two household jobs. They are going back to renting a smaller place to live within their downsized budget. It sounds, from your tale, that they may stand a better chance of getting the short sale approved since they have a documented “distress” with the job loss.

[UCGal]

It doesn’t surprise me that banks aren’t acting in their own best interest… they didn’t on the way up, either.

May I ask an impertinant question? If the home had kept its value would you be staying in the home? Are you going through foreclosure because the home lost value, even though you still have the means to pay the mortgage you obtained?

I have friends who are pursueing a short sale – but in their case they lost one of the two household jobs. They are going back to renting a smaller place to live within their downsized budget. It sounds, from your tale, that they may stand a better chance of getting the short sale approved since they have a documented “distress” with the job loss.

[UCGal]

It doesn’t surprise me that banks aren’t acting in their own best interest… they didn’t on the way up, either.

May I ask an impertinant question? If the home had kept its value would you be staying in the home? Are you going through foreclosure because the home lost value, even though you still have the means to pay the mortgage you obtained?

I have friends who are pursueing a short sale – but in their case they lost one of the two household jobs. They are going back to renting a smaller place to live within their downsized budget. It sounds, from your tale, that they may stand a better chance of getting the short sale approved since they have a documented “distress” with the job loss.

[UCGal]

It doesn’t surprise me that banks aren’t acting in their own best interest… they didn’t on the way up, either.

May I ask an impertinant question? If the home had kept its value would you be staying in the home? Are you going through foreclosure because the home lost value, even though you still have the means to pay the mortgage you obtained?

I have friends who are pursueing a short sale – but in their case they lost one of the two household jobs. They are going back to renting a smaller place to live within their downsized budget. It sounds, from your tale, that they may stand a better chance of getting the short sale approved since they have a documented “distress” with the job loss.

[Reality]

Be a man and pay your obligations.

[Reality]

Be a man and pay your obligations.

[Reality]

Be a man and pay your obligations.

[Reality]

Be a man and pay your obligations.

[Author]

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