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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (110861)	3/17/2008 9:41:23 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 306849

I wonder how many homes purchased in 05-06 were truly owner occupied. No way of telling due to misrepresentations on docs. So do you think they will just be bulldozed? Listen.. even if rented out for 1/2 the loan's mortgage payment, that suggests the property is worth 50%.. People HAVE TO LIVE SOMEWHERE, which creates a constant, and relatively stable, demand.. The only question is who's going to ultimately own that home (and the land that exists underneath it).. Current owner, or new Landlord.. The total RE value backing them could be a lot less than 50% There's a flood of uncertainty for good reason Which is why Forbes' idea seems so interesting.. because in a period of uncertainly, people make the CERTAIN decision that if they can't sell it, better to declare it worthless on their books rather than just giving it away in an illiquid market. They can then wait for the markets to become liquid again at some point and hopefully be able to recognize value THEN.. A 12 month, or permanent, time out on mark to market would RESTORE a bidding process as it forces people with your perspective to return to the market and place bids because now there's uncertainty whether the mortgages are actually worthless, or hold intrinsic value. Hawk