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Wednesday, July 9, 2008

Out of this mess, perhaps something good...

July 9, 2008
Lynnsy Logue The Real Estate Lady and Condo CanDo in Charlotte, NC
Out of this mess, perhaps something good, perhaps…
I liken the sub-prime mess to cleaning out my worst closet. Every single thing must come out…off all the shelves, out of boxes, pulled from racks, removed from hooks,to he very top where I find mittens and caps to the floor and the extra bag of batteries, an extension cord, a dog brush.All on the foyer floor, down the hall and some things stacked on the kitchen table…it is a magic closet because there is much more in it than I remembered, items forgotten some of them mine, some from guests, some…who left this anyway?
But the resemblance to the sub-prime ends there. I read an article today, I’ll quote, sometimes the rating agencies deviated from their own models and their own procedures.
The problems were serious enough to cause concern among employees of the agencies themselves as cited by internal e-mails uncovered in the SEC review.Among the conflicts of interest cited in the SEC report were the practice of companies that issue the securities paying the rating agencies for their work.The rating agencies have had to downgrade thousands of securities backed by mortgages as home-loan delinquencies have soared and the value of those investments has plummeted. The downgrades have contributed to hundred of billions in losses and write downs at major banks and investment firms.And then this, speaking Tuesday to a mortgage lending forum Treasury Secretary Henry Paulson said that many of today’s unusually high number of foreclosures are not preventable. There is little public policymakers can, or should, do to compensate for untenable financial decisions. And those very words signal that our problems are not mere closets. There are many layers…some were players, some are innocent bystanders.The players who invested lost money. Others lost their money and their homes.Some things never go back in the closet. For now. Many of us are weighing the details, looking at footprints, asking ourselves and others how can we do better, be better as real estate professionals. And some don’t care. They never did. It is just hard sometimes to tell us apart.

Lynnsy Logue The Real Estate Lady and Condo CanDo in Charlotte, NC

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