7.17.2010
Here’s the story – Condo Vultures – 4,000 foreclosures/month
Banks likely know they need to repossess now if they hope to get anything for these houses in a rising rate environment. Therefore, now that the Zero Interest Rate Policy (ZIRP) of the Fed has allowed the banks to borrow at Zero and lend out at 5% (a margin much larger than average), they have cash on the balance sheets – enough to take the losses that they misleadingly didn’t show on their balance sheets over the past year or 2 (banks have to put “non-performing loans” and “real estate owned” on their financial statements – both numbers are negative to bank valuation if rising).
So now they will start plowing through all the non-performing loans and foreclose those people…
