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JPJonesParticipantStan,
“…but there will be an active and vibrant secondary market for loans…likely even those of the Jumbo or subprime variety at appropriate risk-reward valuations.
I assume by “appropriate risk-reward valuations” you are talking about higher interest rates for borrowers of said secondary market loans. Would you please explain how the higher payment that comes with those higher interest rates won’t bring the cost of the property down to compensate? I’m having trouble following your logic.
JPJonesParticipantStan,
“…but there will be an active and vibrant secondary market for loans…likely even those of the Jumbo or subprime variety at appropriate risk-reward valuations.
I assume by “appropriate risk-reward valuations” you are talking about higher interest rates for borrowers of said secondary market loans. Would you please explain how the higher payment that comes with those higher interest rates won’t bring the cost of the property down to compensate? I’m having trouble following your logic.
JPJonesParticipantStan,
“…but there will be an active and vibrant secondary market for loans…likely even those of the Jumbo or subprime variety at appropriate risk-reward valuations.
I assume by “appropriate risk-reward valuations” you are talking about higher interest rates for borrowers of said secondary market loans. Would you please explain how the higher payment that comes with those higher interest rates won’t bring the cost of the property down to compensate? I’m having trouble following your logic.
August 8, 2007 at 10:48 PM in reply to: Slow decline or is a big chunk about to be ripped out? #72064JPJonesParticipantI’m having trouble getting my head around the build-up of REO properties. The longer banks hold these properties in this market, the more they’ll eventually lose on the sale, right? On the flip side, if they dump every REO into the market as they come in, the flood will push the market down faster. So they lose either way. What I can’t see is where the breaking point is where the banks have so much REO property in a declining market that they have little choice but to dump it all and realize the loss.
Other than not wanting to flood the market all at once, what factors keep banks from wanting to offload REO properties?
August 8, 2007 at 10:48 PM in reply to: Slow decline or is a big chunk about to be ripped out? #72181JPJonesParticipantI’m having trouble getting my head around the build-up of REO properties. The longer banks hold these properties in this market, the more they’ll eventually lose on the sale, right? On the flip side, if they dump every REO into the market as they come in, the flood will push the market down faster. So they lose either way. What I can’t see is where the breaking point is where the banks have so much REO property in a declining market that they have little choice but to dump it all and realize the loss.
Other than not wanting to flood the market all at once, what factors keep banks from wanting to offload REO properties?
August 8, 2007 at 10:48 PM in reply to: Slow decline or is a big chunk about to be ripped out? #72192JPJonesParticipantI’m having trouble getting my head around the build-up of REO properties. The longer banks hold these properties in this market, the more they’ll eventually lose on the sale, right? On the flip side, if they dump every REO into the market as they come in, the flood will push the market down faster. So they lose either way. What I can’t see is where the breaking point is where the banks have so much REO property in a declining market that they have little choice but to dump it all and realize the loss.
Other than not wanting to flood the market all at once, what factors keep banks from wanting to offload REO properties?
JPJonesParticipantIs your friend an ostrich?
JPJonesParticipantIs your friend an ostrich?
JPJonesParticipantIs your friend an ostrich?
JPJonesParticipantThose are some harsh responses, but it’s the truth. Read through the bubble primer, as I think it will give you the answers you are looking for and help you to ask the right questions.
JPJonesParticipantThose are some harsh responses, but it’s the truth. Read through the bubble primer, as I think it will give you the answers you are looking for and help you to ask the right questions.
JPJonesParticipantThis was very insightful. Thanks for the info.
JPJonesParticipantThis was very insightful. Thanks for the info.
JPJonesParticipantSD Realtor:
This article might provide a little more insight into the statement by Kunz you quoted:
http://news.yahoo.com/s/ap/20070727/ap_on_bi_st_ma_re/all_business;_ylt=Agzd0pT1Dtpt3wuuI62hokVIOcEF
In short, he’s calling BS on those in the industry who keep saying they didn’t see the housing bust coming.
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