Most people ask - why is this financial crisis happening.  Who is to blame?  Well - here's who.  Banks.  And stupidity.

It's like the "butterfly effect".  If you never heard of that....it is the theory that.......

see also:  http://www.boston.com/realestate/news/articles/2008/10/01/phantom_owners_block_path_from_blight/

 

Peter Casey (mentor) - opinion in Banker and Tradesman:

http://www.bankerandtradesman.com/issues/5_358/editorial/201098-1.html

about banks not making it easy for towns to buy foreclosures.....

Here's what has caused the financial mess.  Homeowner buys or refinances home they can't afford.

 

Use 32 woodward (henning) example - give prices and loan amounts.

 Here's the issue - i have a willing and able buyer, ready to buy this condo 20% down, good employment (lawyer), etc.  Great borrower. 

We submitted and offer on 6/13/08.  Offer accepted by seller immediately.  Bank now hasthink about it.  and think about it.  and think about it.

Fast forward to September 30th (give updates of comunications in between)....still no response.

 

Why do banks take so long to authorize these short sales.  It saves them money.  See post about foreclosure losses.

They are pursuing foreclosure at same time potentially.

Why?  Get a deal done, save face and money, move on.  Don't hold a bad loan.

But since the loans have been chopped into unrecognizable pieces, the "servicer" needs approval for 57 investors in 43 countries to make anything happen.

 

Most buyers walk away.  Most properties are foreclosed on.  Most loans are written down.  Most banks go out of business.  All becasue they need too many people to approve a $20K under asking offer.

Stupid.