Usually when you do not understand something it is for 1 of three reasons.
1 You cannot comprehend what is going on.
2 The situation makes no sense
3 You are missing part of the information.
In the case of the "bail out" I have been turning over things that I do not understand. Today listening to this all while I work I have come up with number 3, the missing piece.
What I didn't understand, and this is something that has been blogged about is, Why is it taking so long to get short sale approvals and foreclosure offers approved ? I have one where we are going in on a short sale at 85 percent of asking. I have seen some at 95 even 100 percent of asking that have taken a while to approve. Or in some cases not approve. I have seen foreclosure deals where the buyer was willing to do the mortgage with the lender and would have, in these types of cases, made the lenders money. But many of these deals were not accepted.
Now I ask myself, if I am drowning and somebody is throwing me a life preserver do I not take it and tell them I am waiting for a boat? No ! Not unless I see the boat on the horizon. The boat is the bail out.
Listen to the talk. ALREADY THEY ARE DEBATING AT WHAT PRICE THESE SECURITIES ARE GOING TO BE BOUGHT AT. Bernacke even said depending on the regulations some institutions might choose not to participate!!!! What you are drowning and don't take the raft. This is being fleshed out today and yesterday. No wonder the BIG guys tried to rush this through.
So now I understand. The big boys are waiting for Uncle Sam to save them. The fact that a first time buyer could get into the market doesn't mean anything . They want more!!! I sincerely hope Congress sees through this for what it is. I hope we get some type of package with very very strict oversight and something that causes the makers of the pain as much pain as they have caused.
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Charlie Ragonesi All Mountain Realty Big Canoe and Mountain Blog
On line at www.allmountainrealty.com Call at 706 579 1098
You may be missing a few more pieces to this puzzle. The economy is a very complicated puzzle, and the casualties of doing nothing, or not enough could be you and I and our ability to feed our families.
Hi Charlie, Plenty of details still needed for this thing to pass muster. I understand that it is needed and that the results of doing nothing could far exceed this cosy.
I've had the same thing happen to me on a deal. I put in an offer the bank does not accept the offer; they come back with a counter offer too high; my buyer walks away finds another property and purchases it. Then the Realtor calls me up the property is priced below my offer wants to know if my buyer wants it. I say no thanks the bank should have taken my offer to begin with they would have saved both time and money.
I agree with you. They need to take the blinders off.
I agree with Hope, I couldnt have said it better myself!
Based on everything I have been able to gather the bailout seems the only solution. But... I am totally in favor of limiting the income of the executives in the bailed companies. Bonuses should be the reward for exceptional performance.
I'm OK with all that everyone here wants from and for this bailout...
I just hope that it happens quickly and before we are headed for double-digit inflation, double-digit unemployment, $10/gal gasoline and before a new administration...
...and more to the point: Before our damned politicians TALK it to death!!
Charlie,
I see your point but think we more enforcement not oversight - oversight means regulation and bureaucracy.
Steve
I agree with your overall assessment of the bailout but don't think that it has anything to do with the trouble of short sales, foreclosure purchases or mortgage workouts. The trouble with those andwhy they take so long and often make no sense is that the entity that you are typically dealing with, the servicing company, owns no part of the actual debt and is not in a position to make the deal. They need to get approval from the entity, or in most case many entities that actually own the debt. Those darn securities...
I don't understand the unwillingness of banks to cut their losses in regards to short sales. You would think it would improve their liquidity.
I am also nervous about how much freedom the Treasury seems to want to do this bail out and with so little accountability (in fact, I expressed it in my own blog today!). Why do big corporations seem to think they should be immune to losing after making risky investments?
Carey
Charlie,
This sounds like somebody scrambled the Monopoly and Clue games together and is trying to figure out the rules of play!!! Thanks, Fran
Charlie, And I thougt that is was just me. I got a counter yesterday for one of my shorts. The counter was the investor will take $44,000. The buyers offer was $32,000. Wells Fargo owns and services the CONVENTIONAL loan. Who is the investor? The TAX PAYER! I say take the offer and RUN with it!