Jeff Hines from ., FL 

Posted on Sunday, December 19, 2010

Hi Shari Olefson We are buying houses at the courthouse foreclosure auction, but the interesting story, is the banks are not releasing much inventory into the market, they are managing the slide downward in price, by artificially limiting supply. Here in Broward County there are 300 foreclosures going through the courthouse a day, but only about 10% are actually sold. For 90% the “bank” takes them back and puts most of them into the shadow inventory. So instead of this depression in housing getting on and done with, it is a slow road to recovery, many years, a process that could otherwise be over in a year or two, judging from economic history, in past downturns where there was a diffusion of banking interest and a rush to the bottom. Today we have only one mortgage company, the US government, that owns all the foreclosed houses. And so the government is managing the downslide, with us in Florida losing at least half of valuation. And how much more? A lot; but that is a debate. The other story is the intersection of taxes and the bubble; as asset values increased, so did the real estate taxes, and spending and all subsequent efforts by the government to prop up spending; keep the bloated government payrolls, firefighters making 300,000 a year with pensions of 1 million a year, are contrary to the readjustment process that must take place in order to rebalance our economy. To the extent we artificially prop up certain sectors of the economy, recovery will be sooooo slow. See story in Miami Herald, September 23, 2010. My story idea; we were real estate investors, believed in the option mortgage pushed by WAMU, Countrywide, etc. and got cremated in the burst of the bubble, and now are trying to recover in the foreclosure market. We use investors’ money to buy, fix and sell. See our photographs at our web site, Yours truly, PS: We are looking for private investors, the banks are not lending, we no longer have a hedge f

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