Think of it like this. You live in a neighborhood of 800 homes. Mr. Paulson buys up 40 of them. There goes the neighborhood! Under the present underwriting guidelines for every lender in the USA, the price paid for each house becomes the new comparable for the other 95% of the homes in your neighborhood.
I read this on Bloomberg this morning in an article by Craig Torres and Eric Martin:
Officials "have designed a financial bailout plan that is not only misdirected, but may further exacerbate problems in the housing market,'' says Eric Hovde, chief investment officer at Hovde Capital LLC, which manages $1 billion in financial services stocks." Just as foreclosure sales are pressuring housing prices today, government sales will only make matters worse.''
I believe he's right.
I'm Mike in Tucson, your preferred Tucson, Arizona mortgage lender.
Think of me as your local expert.
