What are owners about to foreclose doing?

Delusion!

They're fixated on their paper profits of 2-3 years ago, and hoping (against hope) that they can string their creditors along until the market turns around again and they can sell at or above the previous peak.

I suspect you'll hear from that apartment owner's broker again in the next few months.

you are just too early, it takes tons of REOs on the mkt for sellers to get humble. if you want to buy now, you'll have to pay more. call it the "not-humble yet" premium. you know the FC process in NY takes 450 days, right? it's not a straight stressed sale as in states where the whole process takes few months.

"If he sold at the price I offered (and he accepted for a while) he was going to be able to pay all debt and keep some money."

he's looking for a more generous knife catcher. remember that in his mind "keep some money" might look like "certain % below what i took for granted i had". true, you are paying all his ATM party money though, but that money might had been spent already. why does he have to care? for him is foreclosure (and FICO hit) or the little bit of money you are allowing him to "keep". hence, not much to lose by hoping while dreaming for a white knight.

What's happening is they're refusing to bend over and take it from profiteering vultures, and they're understandably hanging in there, hoping for a miracle.

mimi,

Is this in NYC?

"they're refusing to bend over and take it from profiteering vultures"

wow, these guys have their pride too. very true that those vultures looking to get their "dream house" thanks to the misery of the current owners can be smelled miles away. mimi, why don't you ask the owners if there's any type of arrangement you could help out with? like helping them to move to a rental if that's what they chose to do. that attitude goes much further when they convert buildings and move out older tenants. the attitude of "get my $10, you are f*ck anyway!" doesn't go as far.

Yes, a brownstone in Harlem. Matt, this people made 400% in less than 10 years, took over a million of profit in their pockets already and I am the vulture!!!!! Your post is hopeless, as always.

That's just plain silly! He should take the money and invest it on the stock market, i'm sure he'd get back the difference in no time.

"this people made 400% in less than 10 years, took over a million of profit in their pockets already and I am the vulture!!!!! Your post is hopeless, as always."

vulture in the sense that you are trying to profit from the desperation of others. you don't find them as desperate so you wonder "why are they so nuts?". anyway, it's their decision to make. if you are right, you will be able to buy exactly the same property at a REO auction some time from now.

A bubble is a bubble. If I make an offer of what I think is fair, and it still represents a 400% profit for the owner, why does my offer make me a vulture?

Mimi, we understand you're not trying to do the seller any favors.

In fact, it sounds like you're upset that he won't allow you to screw him.

And you're surprised about this?

This is all the money I have to buy a house, is not me speculating on their despair....

remember that there is speculation of a cut in principal owed to those underwater. if those streamline mods that cut principal come and they sold earlier, they will regret it. on top of it, you have the media calling the RE bottom. what would you do in their situation?

Admin, I see. This is understandable, though I never understood how people in unpayable debt sleeps at night.
Matt, you are a jerk. I am not trying to screw anybody. This person made a ton of money already, and tried to sell the house for 1 1/2 year!! I am making him a favor!!

"This is all the money I have to buy a house, is not me speculating on their despair...."

so then accept their decision and buy now a small condo. why being upset at a change in the decision of somebody who's variables (loan modifications, expectations of a bottoming RE mkt, personal circumstances...) change. it's his right to change of mind and take the time to reconsider his options. it's not an easy situation nor easy decision to make imho.

This is true, admin. I am upset, since I had an accepted offer for 2 weeks. My post was not so much about my summer of discontent, but more of a question about why people in this situation choosing to not sell for months and months while getting closer to be taken over by the bank. Your explanation about the principal was helpful. Thanks.

"This is all the money I have to buy a house"

And you clearly can't afford THIS house.

Move on to something more affordable.

people are choosing

what difference does it make whether he made 400% or 10% profit? He was bold enough to buy a place in Harlem pre-gentrification, and that gamble paid off. its worth what its worth - the profit or lack thereof of the seller is irrelevant. Are you offering to pay '07 prices for people who bought then - b/c that way they wouldn't lose money? of course not

"Admin, I see. This is understandable, though I never understood how people in unpayable debt sleeps at night. "

imho it's way much less difficult to deal with the bank than with a homeowner in trouble. we will see how it goes though. i know what you mean about how much debt people are willing to load on. have no idea whether severe optimism about the future (which in these types of ponzis only means the ability to find somebody more optimistic than themselves) is a religious thing or whether it's environmental. have yet to understand it.

mimi, don't take it personal. i've seen lots of apts in harlem that were bought for $150K, less than 10 years ago, which are now put up for 3 or 4X that amount. People do not want to sell for what is realistic in the market today, even though they'll still make a ton of money. I wouldn't blame the sellers though, I would likely try to hold out as long as possible. They probably think they'll make an extra 100-200K if this market corrects itself soon. I believe they are delusional.

MIMI is Right !! I talk to brokers marketing these distressed properties and all I hear is optimism These sellers should get outta the way and let the market work for Mimi and me..

Printer, they have to accept that the market is down in all Manhattan. Their gamble paid off, but there is a reason that this house sat without selling for more 18 months...By the way, it is still a gamble to buy in Harlem...
My point about the profit that they've made has to do with understanding their psychology. If you bought at 1m and have to sell at 600k, I understand the reluctance to sell it...

Toward an answer to the original question:

I have a relative in Michigan who is/was facing foreclosure. We thought they were going to foreclose. They considered a friendly foreclosure, which means the mortgagor/homeowner just hands over title, there is no lis pendens or court proceeding. The problem with that is, mortgagor owes capital gains taxes which in this case would have been a lot.

So relatives decided on hostile foreclosure. Then, when all hope was lost, they accepted their fate, the bank swooped in and made them an incredible offer, which they accepted. Their monthly payment is now slightly more than 1/3 of what it was. Originally bank said they had to live there, they could not rent it out, but now that too has changed and they are moving out and renting their old house and there is no foreclosure. There are some conditions to this offer, I don't know what they all are, but they can stay at this payment for 5 years.

So what I think is really going on is a lot of little creative deals like this that are flying under the radar. Banks have every incentive to get creative; think about it. Even in Brooklyn. Some journalist should get out there and find out what all is going on.

My relatives got into this pickle owing to job loss, it was not related to bad financial planning or a lender taking advantage of them. They put something like 20-25% down, they had a fixed rate loan. But they bought at the top of the local market (nobody knew that was the top at the time, of course) and the job loss pushed them over the edge.

Thanks Fluter, interesting.

but guys, those people that bought in harlem 10 years ago were absolute pioneers... people that ventured into a fallujah type of lifestyle (ok, i'm exaggerating for emphasis) and transformed the community, lived through the clean up.

when a neighborhood changes from a crack zone into an area where whites wouldn't be afraid to live prices do adjust drastically. it should be taken into account when complaining about profits that are too high. it went from barely livable to livable. that's a huge part of the run up and those people deserve to keep that part imho.

certainly they deserve a hefty profit, but getting a 500% profit on real estate in 10 years is simply absurd.

Well, they were getting almost 500% with my offer...some of these people were asking for 1000 % two years ago....

how much are you willing to pay to live in a block that trades crack as main source of income? lets face it, you would probably offer $0. then, with only petty deals here and there? you will offer more than $800k... there you go, infinite profit.

http://www.amazon.com/Home-Girl-Building-Dream-Lawless/dp/1400065267

most people don't know that in harlem 10 years ago neither yellow cabs would venture.

The article posted by Fayek about sellers getting the message contains an interesting link related to this thread's topic:
http://blogs.wsj.com/developments/2009/08/18/has-government-intervention-stalled-home-price-declines/

yep mimi, that link includes the issue of the different lags through the foreclosure pipeline (that depends on state regulation)

admin - interesting book, maybe i'll check it out

maybe i'll look into buying some RE in baghdad. hopefully it won't be a requirement that it must be my primary residence.

"He is about to foreclose, as is the owner in another house I am interested in. These people made more than 400% on their investment. They took a ton of equity out."

And this shoe is one I've been on my soapbox about so much.

30yrs, I really would love your input. Could you elaborate?

Admin, You are really a racist piece of work. Harlem only became livable when white people moved there? This vision of so-called white "pioneers" who discovered this terrus nullius inhabited only by crackheads ignores the fact that there is and has long been a black middle and professional class in Harlem who have owned their homes for many years. The notion that their white skin privilege entitles whites who moved into Harlem a mere ten or so years ago to make every cent they spent and them some for the hardship of living around all those dangerous dark hordes is just a racist fantasy, and disgusting.

Mimi a lot of people took out helocs and did refi that did nothing more than consume their supposed 'capital' gains. Therefore there is much less equity than would appear at first look in NYC. Plenty of people are holding on by their nails hoping that the market will rebound but their hands will be forced to pay the piper. Just chill mimi. Unless you got windfall there is no need to transfer wealth. Cause that is in effect what you are doing by bailing out someone else's mistake. Enjoy traveling, cooking, reading, learn to fly a plane, take ballet lessons or tango, just put your re checkbook away.

Lets revisit this:
1. Mimi points out that the person who has been trying to sell for 1.5 years (at a price that is grossly inflated -- you would see that if you looked into the specific property she is talking about) finally accepts her offer, and then reneges 2 weeks later w/o a real explanation.
2. The person is in foreclosure, and has reached that wonderful situation by taking out substantial equity over the time, i.e., they kept increasing their borrowing as the market went up w/o regard to ability to pay, otherwise known as using the house as an for living expenses. Very responsible indeed
3. She is called a vulture for trying to help the SOB by a sale before he goes into foreclosure and ruins his credit rating. Incidentally, knowing something about the deal her offer was very reasonable for the specific property and this is why it was accepted

Very logical all the way through. I had posted about another person in Harlem who has done the same trick -- they borrowed and then we see a lis Pendens. A few months later comes a new loan which covers the previous one and more. Months later a new Lis Pendens and a new Loan that has a higher amount. Luck runs out in Sep 2008 and now foreclosure is coming. IN 5 years the person churned through $1 million and no payments to show for it. Now the bank steps in and forgives much of her loan under the fab Obama plan.

Just who is being screwed and who is doing the screwing?

Be real people.
Aha we have the Harlem buying pioneer who deserves to be rewarded. Indeed, and Mimi the pioneer who ventures forth in a time that presages perhaps a significant drop in the Harlem market is screwing the pioneer?

"\Aha we have the Harlem buying pioneer who deserves to be rewarded. Indeed, and Mimi the pioneer who ventures forth in a time that presages perhaps a significant drop in the Harlem market is screwing the pioneer?"

ok, you convince me, let the pioneer sink! (along with obama's loan modification plans)

"Admin, You are really a racist piece of work. "

thank you, nothing better than an insult from a self-righteous piece of s*.. work :-)

mimi, w67 correctly assesses what I was getting at. there's a lot of talk about how Coop's are immune from foreclosure because of cash requirements, and how only people who bought after year X are in danger, but I keep saying that because of how much cash-out refi-ing was done, a lot more people are under water than you might think simply by looking at purchase numbers and dates.

30yrs, I've been assuming that cash-outs weren't all that big a deal, based only on how my co-op handled them 15 years ago, and how *I* wouldn't have wanted to go through the hassle. (Great at wishful thinking....)

Now I've been digging around, finding stuff like http://97.74.79.241/0000815E.pdf, and see it was much less onerous than I'd thought. "Hey, why don't we borrow against this and get us a condo to flip. Can't lose."

Mimi: Why doesn't the owner sell his brownstone to another instead of you, that way he can keep his well earned paper profit and previously cashed out millions. Manhattan is currently having 800 or so listings go to contract each month. I'm sure your not the only vulture who sees great opportunity in this unit. Tell the owner that your bid gets dropped by 10k every 10 days. Sign now, or fuck off.

Patient, the owner took the house off the market in the midst of foreclosing. My post was related to understanding how sellers with unrealistic aspirations who wants a price that nobody was willing to pay end up taking the place off the market. Is it because banks are helping them? If this is the case, we will not know what is the real price of a house until the banks stop doing this. I am not sure that banks are going to proceed forgiving the NY owners a big chunk of debt as they are doing in Florida (as per the story posted by other user in this thread.) Banks, car producers and credit debtors are getting bailed out. Many of us, with our life savings significantly reduced, are left not knowing what is the real value of a car, a house, a bank.

don't be so sure that there is any logic behind their actions. as frustrating as it is, best to watch and wait.

you're right there, bailouts do make the pricing mechanism less transparent (and let me add, that's precisely the point of the bailouts)... that's what FC moratoriums do, that's what tax credit for homebuyers and artificially low mortgage rates are meant to achieve.

the question is, why would people be willing to buy into an artificially inflated asset? it only makes sense if you believe it will keep on being artificially inflated at the current level or higher (which might be a fair assumption by the way). otherwise, knife catcher!

well, the other possibility for this to make financial sense is to be a buyer that takes advantage of the asymmetry of profits (and the non-recourse feature). if prices go up... great!, if they go down the taxpayer gets the bill and only the FICO is hurt (this assumes the buyer puts as little downpayment as possible, 3.5% thanks to FHA for example). on top of that, there's a real possibility of living rent free in the unit for a year and a half.

Guys, thanks so much for your opinions! I just love u.
w67, I'll start doing more of the cooking, which I enjoy. Tango classes, I don't need. I've been dancing this for many years....

NWT: "30yrs, I've been assuming that cash-outs weren't all that big a deal, based only on how my co-op handled them 15 years ago, and how *I* wouldn't have wanted to go through the hassle. (Great at wishful thinking....)

Now I've been digging around, finding stuff like http://97.74.79.241/0000815E.pdf, and see it was much less onerous than I'd thought. "Hey, why don't we borrow against this and get us a condo to flip. Can't lose.""

This is why I've been harping on this for months. there's lots of people who pulled out equity to do all sorts of things. look at my post ?2/3? down the page here 3 months ago http://www.streeteasy.com/nyc/talk/discussion/10494-this-summer-will-be-a-bloodbath

Admin, You are still a racist piece of work. Tossing expletives my way in no way changes that.

so again, why on earth do i have to care what you think?

30yrs, I just read your post of 3 months ago. Brilliant.
What about the banks bailing out people who refinanced? What i mean is not a fire sale to avoid the credit stain, but to allow them to stay and pay 1/3 of what they pay monthly and forgive the rest, as in the poster's Miami example? Is this happening in NY? If so, can it last?

and let's be honest, true you are politically correct (or at least demand that from others) but hey, prove me you are not racist before talking about others.

wez all got issues... he who throw stone...

it's personality. i tell it like it is and don't see the upside of being politically correct, cherry sure does though.

Admin "when a neighborhood changes from a crack zone into an area where whites wouldn't be afraid to live prices do adjust drastically. it should be taken into account when complaining about profits that are too high. it went from barely livable to livable. that's a huge part of the run up and those people deserve to keep that part imho."

Sorry, but if I read correctly admin is giving a description of a reality. This things happened simultaneously. Harlem became more livable, is far from the crack zone it was and whites (and blacks) are way less afraid to live there than before. I don't think this qualifies him as a racist. Maybe I am missing some info here...

Racism is an issue of extreme complexity.

Harlem offers, like many other neighborhoods, the experience of learning to live together in a community (not much left of that in Manhattan), possibly enriching your life on the meantime, witnessing the signs a very crude and tough past along the way, hopefully being respectful and giving back to a community with so much worth to preserve...like the beautiful architecture!...not to mention the music and humanism embedded in Harlem's fabric.

"Harlem offers, like many other neighborhoods, the experience of learning to live together in a community (not much left of that in Manhattan), possibly enriching your life on the meantime, "

"Enriching your life" how? By witnessing daily drug deals and patronizing 99-cent stores and stores that sell clothes with a high lycra content and bedazzled skulls?

*****
"hopefully being respectful and giving back to a community with so much worth to preserve...like the beautiful architecture!...not to mention the music and humanism embedded in Harlem's fabric."

Ah yes. Exactly the way the black community was "respectful" and "gave back" to the Harlem community before THEM ... the Dutch, the Irish, and Eastern European Jews.

God Matt, you are hitting new lows here. Your post earns the prize as most stupid racist post ever in SE. Congratulations.

Yes, of course I'm "racist".

And you're a self-hating politically correct moron.

Feel better now?

actually matt's pretty consistent.

hilarious. matt thinks someone might look to him for affirmation?

Indeed, I tell it like it is, whether the politically correct crowd wants to hear it or not.

no matt, you tell it like YOU see it. even though i doubt you do, since i seriously don't think you've spent much, if any, time in central harlem.

I've been there quite a few times, and I've seen enough to know that the vast majority of Harlem's cultural history (that of the Dutch, the Irish, and the Eastern European Jews) has been effectively erased by its current inhabitants.

oh matt...lame, lame, lame. "i've been there quite a few times?" that's the best you can do? back to the cable bill with you.

Mimi, do you know if the owner has other properties as well? What is the standing of these properties? Is you offer above or below the mortgage on the property, and by how much (as a fraction of the property value)? These details could create a clearer picture of things, I think. It's possible that the owner could squeeze more cash out of the house by keeping it and renting it, say, than selling to you and paying 5-6% in broker commission. It's also possible that the money taken out was used to buy other properties, which greatly exacerbates the complications in this person's finances. In my estimation, people who experienced this type of property appreciation fall into one of two categories: those that knew it was an unsustainable bubble, and those who thought this was the normal state of things. The former would have gotten the hell out of dodge 1.5 years ago or well before; the latter would have cashed out and levered up with other negative-cash-flow "investment" properties not understanding that there needs to be a link between cash flow and capital appreciation. My guess is you're dealing with the latter.

In any case, I think you'd be much better off letting this thing go to REO. Just remember to keep a close eye on it and contact the bank directly when it comes time (see other thread where 30yrs talks about insider dealings with REO). You'll get a better price, no doubt, as no one except you is buying this turkey. In the meantime, wait, enjoy life, and don't make a purchase until it's cash-flow positive with respect to renting.

those current "inhabitants" don't have any cultural history, of course.

inonada, thanks for taking the thread out of Matt's hijack!
This is the only property he owns. The rent will be only a tad lower than the mortgage, I think. Do you remember the title of 30yrs thread? I believe that it is possible to start a 3 way conversation with stressed owners and banks. What do you think?

"those current "inhabitants" don't have any cultural history, of course."

I'm not saying they don't.

But let's not ignore the fact that Harlem's history does, in fact, stretch back further than the past 80 years.

"This is the only property he owns. The rent will be only a tad lower than the mortgage, I think. Do you remember the title of 30yrs thread? I believe that it is possible to start a 3 way conversation with stressed owners and banks. What do you think?"

is it a 1 family brownstone? if so another possibility is to offer him to buy 1/2 of it, splitting it into a 2 family residence. that way the owner doens't need to move while solving his financial woes. you get still plenty of space in a brownstone (but with lower carrying costs).

but then you would have to live with this guy? doesn't seem like a good plan.

"but then you would have to live with this guy? doesn't seem like a good plan."

you don't share the living-room, there's plenty of brownstones converted to 2-4 family residences. you don't even share the stairs as one lives in the 1st 2 floors than the other in the upper 2 (this if it's 2 family in a 4 story brownstone. i've seen some converted into 3 & 4 units and the result wasn't a happy one though as too much space is taken over by the stairs, hall ways, ... before accessing to the real unit.

I think she's hoping to get the entire brownstone for herself for a fire-sale price.

It's hardly a firesale price.

admin, the bigger problem with your suggestion is that Mimi would be financially entangled with someone who doesn't get basic financial reality, and has "learned" that something always comes along to make learning it unnecessary.

"I think she's hoping to get the entire brownstone for herself for a fire-sale price."

ok, just pointing out that there are other possibilities to all or nothing. also a seller that's in trouble and would like to stay put (chances are) will consider that this might be a bigger favor to him as it prevents him from having to move. he just downsize.

wrong Matt
She is hoping to get the entire brownstone for what it is actually worth, rather than the speculative run up that occurred in the last 6 years -- 500x of the price at the time.
she is only getting a 35% discount off the current ask which looking at comps is outrageous given the quality of the building.
Remember the guy agreed to sell at her price.

"Remember the guy agreed to sell at her price."

so far i've seen only buyers "walking away" from their offers, this is the first time i hear a seller changing his mind.

indeed admin -- the idea that a financially responsible buyer should hook up with a speculative mortgage chasing person on the verge of bankruptcy to co-share and habit the place is clearly doing them a favor and no more. Mimi - with all the kindness in your heart please do help out the leech.

"so far i've seen only buyers "walking away" from their offers, this is the first time i hear a seller changing his mind. "

i wonder whether there's been a lot of that and i didn't hear about it. or if it's a sign of change in mkt sentiment... okok this is only 1 case, just saying. anybody has a thought about this?

admin, I was going to buy a house with a friend and I asked about it in SE and friends. The unanimous answer is that it could be a legal nightmare (one needs to sell, the other doesn't, divorce, etc...), unless you make a condo conversion immediately. Imagine doing this with someone you don't know! Then, you have 2 duplex condo units, and you can't sell because banks don't like 2 unit condos (high liability if one of the owners defaults.) Is not easy.
By the way, only 5 houses have been sold below 125th St in Central Harlem in the last year.

Mimi, I'm sure there will be someone even more desperate you can prey on. Just be patient.

"By the way, only 5 houses have been sold below 125th St in Central Harlem in the last year. "

sounds really low, do you know what was the "norm" 2005-2008? have the numbers for uptown, but not for this specific area. hey, the 5 that closed were also in dire straits or just priced right?

"make a condo conversion"

indeed.

Mimi, this is the one I was referring to:

http://www.streeteasy.com/nyc/talk/discussion/14051-220-rsd-bank-sale

As far as how to proceed, 30yr is a much better person to ask since I've never done REO and he's been doing it for at least 20 years, according to his name.

Matt, you are on ignore mode.
Admin, if you look for recorded sales, you'll see.

Mimi, if you put Matt on ignore mode, you'll have to watch old reruns of "All in the Family" to get your Archie Bunker fix.

"By the way, only 5 houses have been sold below 125th St in Central Harlem in the last year. "
sounds really low, do you know what was the "norm" 2005-2008? have the numbers for uptown, but not for this specific area. hey, the 5 that closed were also in dire straits or just priced right?
Admin, if you look for recorded sales, you'll see.

i'm not so into this mkt to take the time to look into it. that's why i asked you for a glimpse, to see how out of whack 5 sales in 2008 is. how many did get sold so far during 2009?

but anyway, many of those that sold were just shells, right? (here i'm thinking 2003-2007) guess you shouldn't consider those as 1st residence houses though. they are flip projects many times.

That was funny AH.
Admin, actually I would like to do the job of looking at past sales but SE only goes back 1 year...so I would need to go to Acris or propertyshark and it will take a ton of work. I wonder if there is a database for this. Probably the one UD is building will have this feature.

great mimi, we will wait then. gut feeling tells me those trying to unload a shell for $1M a year and a half ago are kicking themselves now. bet there's about 0 demand for that now. could be wrong though.

no mimi. in your recorded sales search use "any time." it then lists sales back to 2004.

Tks ar! Didn't notice it!!!

mimi, possibilities - (a) seller got better offer after "accepting" yours; or (b) seller fell into some money that removes selling pressure

"30yrs, I just read your post of 3 months ago. Brilliant.
What about the banks bailing out people who refinanced? What i mean is not a fire sale to avoid the credit stain, but to allow them to stay and pay 1/3 of what they pay monthly and forgive the rest, as in the poster's Miami example? Is this happening in NY? If so, can it last?"

I think you are more likely to see short sales than drastically reduced payments, but it depends a lot on exactly what bank and what their current goals are. Systematically, there's a much bigger problem with drastically reducing payments than doing short sales: if the market continues to decline, the lender's position gets worse and worse over time. At least with a short sale, it's over and they know exactly what they are losing and what they are getting. Another problem with lowering payments is as eord gets out it is happening, you get people who don't NEED the reduced payments who apply for it because they figure 'what the hell, why not try to pay less?" At least with a short sale, you're getting a market transaction, you know the seller is taking a haircut and not just trying to angle you.

But of course this all drastically hinges on what programs the government is pushing. look at what happened with 'cash for clunkers' and how many cars sales it generated. If there are government incentives to reduce payments rather than do short sales or foreclose, then that's what is likely to happen. The problem is with the final "is is sustainable?" (your "can it last?"). Look again at the 'cash for clunkers' program: the source of funding was to take money away from the loan guarantee program to generate new renewable energy sources. So we got a short term fix, but if the goal was actually to get more fuel efficient cars on the road, which would be a better long term solution?. How are the morgtage payments being cut so much? Are the payments remaining the same, but merely being added onto the back end of the loan? If that's the case, the property keeps getting pushed further and further under water and the time it will take until it makes it's way about water again can vastly increase as well. If the payments are being that drastically reduced by dramatically dropping interest rates, it's the typical economic question of what can happen if you have "too low" interest rates for too long and how they get subsidized. How long can teh Govt sell bonds at x% but lend to banks at 0% and not print tons of currency devaluing the dollar, etc and not have a serious economic impact of it's own?

My personal feeling is always to let markets "free fall" and hit bottom as quickly as possible. Even if they overshoot the bottom. because in my eyes the most important thing is to get long term appreciation back on track as surely and as quickly as possible, and that happens when you get the 'dead cat bounce" and everyone believes the bottom has passed. The more people who think the bottom is still in the future, the more you will have buyers who legitimately want to buy sitting on the sidelines, and the longer they see prices falling, the longer they think they will keep falling, and remain as sideline buyers looking for signs of a bottom. All this does is to lengthen the period of overshoot on the bottom end and can lead to a significantly lower bottom than if thigs take one feel swoop fall, everyone thinks the worst has passed, and things move forward.

Take a look at the news from around the country where prices took HUGE hits, had tons of foreclosures, and now are getting back to a "normal" market. But it took prices coming down, cleaning out the junk, and starting over. The longer unsupportable deal get supported, the longer you have crap floating out there which won't died. people talk about "zombie condos", well you can have "zombie properties" which can never sell because they are being propped up artificially with "strange" loans. And isn't that what got us into this mess to begin with?