--- In AsburyPark@yahoogroups.com, "radio881gal" <restore88...@...> wrote:
>
> Oak -
> What did you mean by what's backing their 'investments'?
>
I guess the right word here is collateral- when they gave out money for these
deals in their portfolios - what did they get in return, how was it valued, was
money fronted for soft development costs (that were spent for planning but no
real property development etc)
The biggest thing for them and all other developers- how are they carrying
these properties and how are they valued today - or are they using tomorrows
projected as built and sold numbers.
If I gave you a $100,000 mortgage for 30 years, I'd want to know that for the
next 30 years, I have something from you in return that during the next 30
years, I can easily unload for $100,000 and you paid me with no grief during
that time (Or as the principal was paid down, at least your payoff was covered).
This is the meltdown - loans made on overinflated values determined by over
zealous buyers, "investors", dreamers, scams, brokers, bankers and appraisers
(here it comes...):
In the end you can't buy what you can't afford.
that's what my parents told me.
People today are embarrassed to say it to their kids or, for that matter, to
themselves.
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