updated on 11-30-07 13:30

Gee! My fellow agents,

What you guys expect from a conservative employee in a financial bureaucracy? Why they took the 9-5 job? They want to be a nut or bolt in a machine. You expect them to be creative and working hard as an entrepreneur. You are asking too too much!

It seems you guys are not familiar with the mechanism and dynamics in REO markets since nobody mentioned here about ABS insurance, FHA insured loan, or VA guarantee. Why recently CFC has to pay much higher premium (about double) on its originated new loans? Why GMAC took in $36 billion write-off in the recent financial report?

No wonder you guys are upset if you don't know the game rules the lenders wish to play. Why they don't get serious to respond to your offer? Because they are normal guys and act normally to follow the book.

In short, their performance is sort of some real estate investors in the past. Do you remember that "tax shelter" strategy had once been a very popular and profitable vehicle to those high income rich people. Do you really expect them getting rid of a "negative assets" to avoid a "loss"?

Believe me those tax shelter investors would laugh at your face when you said to them: "let us do a normal business as a regular guy in taking care of your problem property." Here is a problem: more loss they take in, more profit they create. Our banking regulations or the status quo of our financial systems dictate them to act differently from you want. Hardly for a normal guy to understand. I don't blame you.

Yes, I believe you are normal. But in a situation when they can get more fat profit by having tax credit out of ABS loss, are you crazy to ask them act as normal as you? No way, Jose. It is a part of their financial planning they found out as a gold pot. They believe themselves normal and your requests are not normal.

It's funny! Who is normal?

Well, there is a saying: "your meat is their poison." Am I right? Remember it is a different market under different ball game rules. Your consumer interest is not to their benefits. Stop whimming and complaining that does you no good. Find a way to get around it instead. You have to "fit" into the specific world to survive or prosper.

I wish you guys good luck!

Posted by Ed Tse on 11/30/2007 01:36 PM

Comments (2)

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2 Comments on A Funny World (5): Your Meat is Their Poison

ED- interesting take on why the lenders don't respond as one would thing they should.

11/30/2007 02:34 PM

by Mark Horan P.A. "The Resident Chef" at Keller Williams (The Resident Team at Keller Williams At-The-Lakes)

Hi! Mark,

Interesting! Great. Finally I have your interest. Probably you can see a difference between some gossip and real stuff here in ActionRain.

Okay, First thing first. I would like to invite you see the difference of a bank and ABS holders.

When we talk about REO, it is automatically out of our mouths: "Bank REO." Is it a real "Bank" own OREO? Probably not. We just used the general term to cover all the institutions who own a foreclosed property. In fact, we misuse the term to include those non-bank institutions. Those non-bank guys include USMS, FDIC, FHA and other private mortgage lenders. For example, Countrywide under CFC stock ticker is not legally a bank, even they do have a subsidy Countrywide bank.

Why I will check it out who owns the REO if possible when I am pleased to buy a REO? If it is a bank under the regulations of our banking laws. I am maybe with a luck and more interest. If not, I will try it but with quite a little expectation.

I have dealing with so many real banks. Among them, Washington Mutual bank is really fast ,good and efficient in doing business that make sense to the public. The asset management of Wamu in Irvine, CA has kept in their minds the best interest of stock holder and general public. They deserve my saluting!

Since CFC is not a real bank. FHA is a government bureaucracy, not in business as a businessman should be. They set their game rules more freely as long as it makes sense to them. They have the luxury to ignore the market forces, let alone your offers.

11/30/2007 07:17 PM

by Ed Tse (richvalley)

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