My Quick Notes have been running a bit long lately. Those of you that remember my early work, remember 10-20 page reports every week. I do a great deal of research, and just as much time is spent in the field. In any event, I like to write, but I need to cut back on the length of my piece offered to the public. It's just not fair to my clients. So here is a true Quick Note I would like to share:

Four Cheers for Fifth Third Bank - We work with many financial institutions, and we see the full range of poor management. But today I want to share a Best Practice that other banks need to follow. I have long said that the banks created this problem along with the greedy builders and real estate agents simply looking for a quick buck. Of course, it took the speculators to kick it all off, but when you get a taste of the drug it is hard to stop . . . when the banks, builders and agents are pushing more and more . . . with free money and promises as powerful as a heroin high. It is no different than poppy seed farmers (builders), processors (mortgage brokers), source dealers (banks), street dealers (real estate agents), and junkies (flippers). I'm going to get emails about that one. But the truth hurts.

Now that we are in the crisis, I've said the banks need to help work this out. Bail outs are useless. We need to get back to basics. And this means banks stuck with properties must sell them for the highest price possible. Unfortunately, that usually means a 50-75% loss. One key factor hindering the real estate market is the lack of mortgage availability. Fifth Third is the only bank we work with that has stepped up to the plate to offer mortgages for buyers of their REO properties. That's exactly what the rest of the banks need to do.

Bogus Bonuses - The other banks think they can dump their properties, and let someone else finance the purchase. Well, since most banks think that way, mortgages are very tough to come by. In turn, this means Demand falls. And if any of these bank executives took Economics 101, this means prices drop. Oh, wait a minute. You need the other side . . . Supply. We not only have an over-supply of inventory, but the banks are still financing builders that are adding to inventory, which means lower prices for the REOS. Get real guys. No, you can't get real, because there is no accountability for your actions. You still get your fat paychecks, and you design your bonuses to grow around metrics you create. So if your bonus was based on profit, now it is probably based on how many REOs you sell, so you push them out the door, lose more money . . . but you get your bonus. I know . . . I'm getting off track. We will talk about the Bonus Game in a couple of weeks. I think you will all be shocked at what we have found.

Fifth Third Trumps the Pack - Fifth Third is actually offering mortgages to buyers of their REOs, and demanding that their agents follow their policies. This means their properties have a better chance of selling at a better price and in less time. All of this means real dollars, not the ka ka created by the Street. Fifth Third is so serious about this program that they provide their REO brokers with two flyers that MUST go in all REO properties. They even tell you where the flyers go . . leave the flyers in the kitchen. On the negative side, they could take this a step further, but this is a start. And it doesn't stop there.

Fifth Third in the Field - They send managers out into the field to visit properties and spot check with agents. Now that's unique. We have analysts that can work at home. And we have executives that wouldn't think of leaving their cushy offices. But Fifth Third sends managers out to inspect their REO properties and meet the brokers. I've got nothing but high-fives and three cheers for Fifth Third. If more financial institutions worked on the solution, we might avoid an economic melt down. Unfortunately, as of now, Fifth Third is the ONLY lender addressing the problem, instead of feeding it.  But . . . .

For additional information visit our institutional website at www.Morgan-Florida.org and our consumer website at www.Treasure-Coast.us or email me Mike@FloridaHomes.pro