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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Don Earl who wrote (11340)	9/19/2008 4:04:55 AM
From: IngotWeTrust	Read Replies (1) \| Respond to of 71475

I cannot help but remember the paid legal beagle JES employeed about 1 year ago, to unravel the "securitized mortgage" paper mess, to get a handle on the underlying bricks and mortar +/- actual sod beneath, value. The report he commissioned from his legal staff assignee was something like only $6 per $1K paper (aka 16:1 leverage) was actual tangibles against which any valuation at all could be concretely identified, let alone assessed. Doesn't matter if someone wants to stay in their house. Doesn't matter if one can short others into oblivion. Doesn't matter what % of US currency is held overseas. Doesn't matter the emperor has no clothes. The emperor is a $6 argon lazer generated hologram.

To: Don Earl who wrote (11340)	9/19/2008 7:42:00 AM
From: robert b furman	3 Recommendations Read Replies (2) \| Respond to of 71475

Not damaging your credit and being a man about having paid too much for something. The world is so easy that when it changes you just give up your integrity? Not in my word or world. Bob

To: Don Earl who wrote (11340)	9/21/2008 7:35:18 PM
From: Gary Mohilner	Read Replies (1) \| Respond to of 71475

Don, I may not have expressed myself properly, if a comparable home was available for rent across the street for substantially less then the foreclosed party's payment, let them rent the house for the same price as the home across the street. Even a move across the street is a pain that could be avoided if banks or govt. had been a little creative in executing these foreclosures. Sure, if the bank could immediately sell the home for what was owed they would have been entitled to do so, even if they took a small loss, it could have worked for them, but typically if the market was down 30% they wouldn't sell for 30% below what they lent, they'd bundle a bunch of similar properties and sell them at a substantial discount to the current price they could bring if you waited for the right buyer, perhaps 50% or less based on what they financed. My point is that while banks and other financial institutions don't like to be rental agents, in this case they would have been far better had they chosen to do so, or hire one of the major RE Agencies to act as their rental agent. I own several properties, the best of them, where I am right now, are in Lake Tahoe, they don't cash flow, and certainly they're down from a year or two ago, but both are worth several times what I paid for them. I own other property that cash flows very well, mostly in Texas and Georgia, and today I could still get substantially more then I paid for them, but not a multiple of what I paid. I've had far more in repairs on these properties, long vacancies, and in short wish I had purchased one or two other Tahoe properties over many cheaper homes elsewhere. My home in Los Angeles is also up multiple times, so it too has been a good investment, but I bought in the late 70's, I don't really believe that L.A. will ever again move up as quickly as it had previously, but it will always be an area that's desirable, so appreciation will almost certainly be found in the future. I've had several occasions as a landlord where a tenant had problems. I generally tried to work with them, sometimes I got burned, others went well. The cost of acquiring new tenants is almost always greater then keeping the current tenant if they want to stay. I believe in many cases the financial institutions could have made the foreclosed on owner into good rental tenants, and if a lease/purchase arrangement was agreed upon, they eventually may have purchased their property back. If they did purchase the property back, you can bet they'd have paid far more then was received when they bundled the properties for a bulk sale. Of course had the financial institution admitted how little they'd get in foreclosing, perhaps the owner would have agreed to purchase the property at substantially more then what they ultimately received, though far less then they owed. Investors in stock often do much the same thing when a stock moves down dramatically. Some will average down and maintain the investment which eventually becomes profitable, and sometimes hold on for big profit. Others will let the stock come back to break even and sell, only to watch the stock rise to new all time highs. I cannot blame a homeowner who gets foreclosed on because the property's underwater, while it hurts the credit rating, it's understandable. I believe if greater flexibility had been shown by the lenders, in many cases either lower interest rates, or a negotiated reduction in the amount of the loan would have kept owners owning, but failing that I still think turning the owners into renters would have been far better than where we are today. Clearly if you're renting, you must do so at competitive prices, without that, you won't get rentals. Gary