We need more of this, not less

Foreclosures jump. Clear out the inventory, let new owners in, let old owners move on with their lives. So far, everything Obama’s doing is hindering this process and delaying a new start.

9 Comments

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9 responses to “We need more of this, not less

  1. Anon E. Moose

    +1

    Foreclosures are not the problem, foreclosures are the solution.

  2. shoeless

    Don’t tell Foobar!

  3. Sump Pump

    I am a first time buyer, new to Greenwich, and I’m confused. Do modified mortgages, homebuyer bailouts, or any other guvment rewards for past irresponsibility even affect the market here? If so, how and when? It would seem that all Greenwich residents would occupy the rarified world of those who deserve no assistance…

  4. Old School Grump

    Sump Pump at 7:36, I moved out a long time ago, but I can assure you that plenty of people in Greenwich got way over-leveraged and over-extended and are in trouble. The thing is, so many of the mortgages involved are jumbos, and I’m pretty sure that means neither lender nor borrower will fit into any guvmint goodies programs.

  5. Sump Pump

    Grump, that is exactly what I’m getting at. On the one hand, it seems the assistance programs would not hide or delay the effects of any problems here. On the other hand, I hear stories (on this forum and elsewhere) of shadow inventory and looming foreclosures in Greenwich. What gives? Is the sky about to fall or not? And if so, what is it waiting for?

  6. Old School Grump

    Sump, I wonder if it’s just a collection of simple things. Like maybe enough of these people have enough money to stretch things out a little longer. Also enough savvy to play legal-type delaying games and enjoy living for free for a while. Plus I think a lot of lenders are still in deer-in-the-headlights mode. Plus I think I read here that Conn enables lenders to go after other assets, which would slow things down. Plus the “talent” needed to facilitate short sales, etc., has got to be overwhelmed by the demand.

    Once CF has returned from his secret midnight adventures in Byram (methinks thou dost protest too much about its lack of charms, sir), I am sure he can give a much better explanation.

  7. Sump Pump

    Thanks, Grump. This Greenwich is a mysterious place indeed…

  8. out looking in

    Sump and Grump-

    There is a price to dump!! Actually, banks carry NPLs (non-performing loans) to avoid taking a charge against regulatory capital. Once a bank “realizes” the loss on the loan, they must adjust downward their capital account. The Fed requires a minimum amount of capital be held by chartered lending institutions. If they delay “realizing” the loss by playing ostrich, they may carry the loan value at much inflated levels…since many jumbo loans are not resold and held by originating banks, there is a strong incentive for struggling banks to postpone recognition…however, the clock is ticking…

  9. Sump Pump

    Out, thanks for you clarification. I understand pretty well how all this works. What I really want to know is how many of these NPLs correspond to addresses on the likes of Round Hill Road, Field Point Circle, Riverside/Indian Head, and Shore Rd/Sound Beach Ave? And even more importantly, how long can these remain NPLs before somebody has to do something?