The Road to Recovery is upon us. Most people believe it or not, are still listening to the doomssayers, yet if you look at the underling events that are taking shape today, and analyze the momentum of activity on the market, you'll discover that multiple offers are being made on more and more property each day, even on November 18th 2008. Typically October, November and December are slow months.
Why you might ask? We all know Convential Lenders are not lending ask brisk as they were in years past, however, having said that, capital markets had stopped lending because of the MBS's, CDO's, and SPV's that contaminated the commercial paper markets. The climate at the Treasury Dept. clearly shows that banks are becoming healthier with bailout money. Fresh capital, not tarnished capital will be hitting the streets soon.
Why you ask? Bad Debt is being reconfiguered or restructuring to performing assets. How, LOAN MODIFICATION! Loan modification will soon shed many of the foreclosures that have been coming on the market due to FASB 157 that took place in Janury of this year, which required lending institutions to balance it's books on the market value of assets versus liabilities. The bottom line, Loan Modifications are turning Bad Assets into Performing Assets with the restructuring of loans, Banks can start borrowing on those good assets as Leverage. They generaly have a ratio of 12 to 1 against it's assets that they can lend out.
That's probably why Treasury Secretary Paulsen changed direction on buying bad debt and holding. It's better to feed the cat and have a healthy animal, than to keep feeding something that has already died, which will prolong the enevitable funeral. Let those Lenders pay the consequences is what is happening, a restructured debt can be eventually turn in to a refinance in the future when the economy is in a better position.
Now you might ask when do we start bottoming out? March 2009. Those who are buying now will reap the rewards, those sitting on the fense will be saying I should have bought when I had an opportunity to do so. I just made an offer on 2 units for $240,000 in San Diego California, if that's not the bottom, it's sure close to it. I anticipate a counter to $275,000 this is an REO, not a short Sale. Those short sales will soon drastically fade away as loan modifications drys any hopes of those would be speculators who are thinking of selling on a short sale and buying another shortsale.
Those buyers out there who want a to capitalize on the market now, can call me at 562-755-3856 to help them buy at todays prices and gain a future investment....
My name is Carlos R. Arvizu Sr. TheDon1950@aol.com
Prudential California Realty
562-755-3856
