Maine property will probably fall to reasonable levels the same time that we’ll see drops in Seattle, Portland, New York, Boston and other such “strong” markets. Their strength won’t save them, just belay the inevitable. When you see prices begin to drop, they’ll practically free fall.

Or at least thus I hope. Lord knows I’m still waiting for the prices here in Seattle to drop. Granted $400K is better than $575-$600K on a year or two ago, but there is a LONG way to fall still…

Your effort to hold large invetories of reo’s was mobile. But now with fannies announcement you have no choice but to let them go. Yes this cause property values to decline across America, thus causing an even more extreme negative equity effect, this causing more of your loans to default, this causing more of you to go under like indymac, cw, etc.
What have we learned?
If you give candy to a baby they will eat it.
If you buy a bushel of hay on credit for 1000 bucks, and tomorrow it’s worth only 600 bucks, you might just let the seller take it back.
Everyone might have a value decline threshold but at some point you would expect most to throw in the towel based on circumstances.
Diffusion of knowledge and information will hurt this situation.

Banks have been greedy and must repair the mistakes they have made. Banks, don’t wait for govt to step in, like in new York, pushing back foreclosure timelines. Be realistic, if someone owes you twice what something is worth, they won’t pay. Modify the mortgage to account for the decline in property value in that area. Give people time to recover from distressed situations. Forget about foreclosure timelines. These ate human beings and you got thin into this mess. You fed too much candy to the baby and now it is sick. Nurture it!!

Catherine was managing partner at Dillon Read, one of the world’s most prestigious firms that gave birth to all sorts of Washington and global insiders for decades. They were the chief investment banker for RJR Reynolds Tobacco, and made extraordinary sums investing all that tobacco money.

As one of the chiefs at HUD in the 1980s, she was well positioned to grasp and predict the catastrophe to come.

She was later offered a job as a Governor of the Fed, which she declined and shortly thereafter became very public in her speaking out against corruption at the highest levels of the GSEs and elsewhere.

Her journey makes compelling reading. Her extensive story is at:

http://www.dunwalke.com/contents.htm

Tony

This is one of a series of articles that were written by Catherine Austin Fitts who served as Assistant Secretary of Housing and Federal Housing Commissioner in the first Bush Administration. Her company Hamilton Securities Group served as lead financial advisor to the Federal Housing Administration during the Clinton Administration.

This is startling, the same home being put in many different asset securitization pools!!! what a scam, the full article/s can be found at http://www.solari.com/archive/housing_bill/#PartV

All this talk about Debt misses the most important point:

Debt is how Money is Created in this Fed / Bank System.

No New Debt = No New Money.

Deflation is happening now because Debt Money is being retired by folks walking away from their Mortgage Debt.

Eventually, folks with a cleaner balance sheet will be loaned fresh new debt money.

This is what the Fed wants. This is being engineered.

This quote was quite compelling, “So now what? It’s hard to see where consumers can turn next. Home prices seem highly unlikely to start rising again soon. Stocks? You never know, but the Great Bull Market looks like a once-in-a-lifetime event. Homes and stocks are households’ biggest asset classes by far. There isn’t much else to borrow against.”