{"id":156,"date":"2010-01-05T11:46:47","date_gmt":"2010-01-05T18:46:47","guid":{"rendered":"http:\/\/privatemoneysource.com\/blog\/?p=156"},"modified":"2010-01-05T11:46:47","modified_gmt":"2010-01-05T18:46:47","slug":"wont-somebody-please-call-a-plumber-the-banks-are-clogged","status":"publish","type":"post","link":"https:\/\/privatemoneysource.com\/blog\/?p=156","title":{"rendered":"Won\u2019t somebody please call a plumber \u2026 the banks are clogged"},"content":{"rendered":"

Clay Sparkman<\/em><\/p>\n

One of my dear good readers sent the following e-mail in response to my last post, Home strippers coming to a neighborhood near you<\/a>.<\/p>\n

\u201cGood topic Clay.\u00a0 Now forgetting about us private lenders, the\u00a0conventional lenders continue to be their own worst enemies.\u00a0 They persist in bringing the\u00a0properties to the city hall steps at 40% over market.\u00a0 When no one buys the property, they have it inspected and insured, pay the utilities, and pay a realtor to sell it for them at a discount.\u00a0 On top of all that they may face the problem that your article addressed.<\/p>\n

Pricing it to sell on the steps would solve their problems.<\/p>\n

In early December, I looked at this piece of bank owned junk in St Helens, Oregon.\u00a0 It was rough around the edges but the bones were good.\u00a0 It was a typical Ranch style, 2-bath, 3-bed, 1400 sq ft, nice large lot, fenced, but no garage.\u00a0 The bank had it listed for $198,000, but they had started out at $139,000 a couple of months earlier.\u00a0 I called the agent and asked them if they had a misprint on the price (as there are nice, newer homes with garages going for $165k max).\u00a0\u00a0 The agent said no, it wasn’t a misprint; the lender had called him when it was at $139,000 and told him to boost the price to $198,000.\u00a0 What is that about?<\/p>\n

Until the banks get their head out, their balance sheets are going to continue to worsen.<\/p>\n

Regards, Alan\u201d<\/p>\n

Well I can hardly say that it is the first time that I have heard of or seen this type of thing with the banks.\u00a0 One does get the distinct feeling that these institutions are somehow unmotivated to remove the toxic assets from their books.<\/p>\n

And it is even worse than all that.\u00a0 As if they needed additional help at slowing down the corrective process:\u00a0 The federal and state governments, with all of their efforts to keep owners in homes which they cannot afford, are seriously compounding the problem.\u00a0 It could take an extra year or two to get many of these bad loans off the books due to the various federal and state requirements being imposed upon the banks.\u00a0 (And that assumes the banks are motivated.)\u00a0 The following NYT article does a nice job of discussing the matter.<\/p>\n

http:\/\/www.nytimes.com\/2010\/01\/02\/business\/economy\/02modify.html<\/a><\/p>\n

And so even though a lot of good things are happening with our economy as of late, real estate prices will not correct until lending institutions provide adequate funding once again to owners and buyers\u2014and the economy as a whole will remain at least partially broken until this occurs.<\/p>\n

And so I say:\u00a0 \u201cWon\u2019t somebody please call a plumber \u2026 the banks are clogged.”<\/p>\n

— Clay (clay@privatemoneysource.com)<\/p>\n","protected":false},"excerpt":{"rendered":"

Clay Sparkman One of my dear good readers sent the following e-mail in response to my last post, Home strippers coming to a neighborhood near you. \u201cGood topic Clay.\u00a0 Now forgetting about us private lenders, the\u00a0conventional lenders continue to be their own worst enemies.\u00a0 They persist in bringing the\u00a0properties to the city hall steps at […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":""},"categories":[21,1],"tags":[40,41,42,43,49,50,51,53,54,58,59,60],"_links":{"self":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/156"}],"collection":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=156"}],"version-history":[{"count":0,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/156\/revisions"}],"wp:attachment":[{"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/privatemoneysource.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}