I think this explains it. Fearing Blight, a California Town Makes It a Crime to Neglect Foreclosed Homes http://online.wsj.com/article/SB124112509277274533.html
This makes the most sense. I say destroy all the homes that are not being sold, that are half built. Clean the land up and let the land sit. Get ride of the inventory......it's been paid for. Start fresh. Its a loss. period. It is like being in a losing position, holding on to the loss and it widens and it brings your P&L down huge...however, every successful trader decides to give you some money to help you out....dump the loss...take the money and start fresh. That is what the banks are doing. The "FINE" they speak of is irrelevent.
Our new economic model... 1. Build, build, overbuild... houses, cars, anything and everything... keep people employed making this stuff. 2. When there is "excess inventory", tear down the houses and dump the rest into the sea. 3. Have the Fed and treasury print money and reimburse the banks and everybody who lost their asses on the "liquidated excess inventory"... 4. Start over... produce everything as fast as you can. Keep people employed. Voila! Why didn't somebody think of this sooner??
Peter Schiff warned it would come to this quite some time ago. He was against it. Why destroy assets that are worth something? Perhaps nowhere near as much as thought before but still worth something.
that story is deceptive. things are not that bad. home sales in california have turned. they are getting multiple offers on property that is priced right. this guy is a california realtor that deals in reos. he has seen a marked change in the market: http://www.youtube.com/watch?v=YVi6dQl1ShY
The median price in Southern California may have plummeted, but in more desirable neighborhoods, home buyers are still engaging in bidding wars. http://www.latimes.com/classified/realestate/news/la-fi-cover3-2009may03,0,7623052.story
Honey, time to spray the lawn http://www.latimes.com/news/local/la-me-spray-painted-grass2-2009may02,0,5760419.story Mortgage reduction bill fails in Senate Banks lobbied heavily against the measure to help homeowners facing foreclosure. http://www.latimes.com/business/la-fi-cramdown1-2009may01,0,6175308.story
http://realestate.msn.com/article.aspx?cp-documentid=19580208>1=35000 No sale: Bank destroys newly built homes Blaming the current housing market, a bank decides it would be cheaper to tear down 16 new and partly built homes rather than try to finish and sell them. By The Wall Street Journal
OK so under new FASB rules should the bank mark-to-market the value of this property (land value $50k) or should we mark-to-best-estimate i.e. $250k
The banks and Goldman Sachs & JP Morgan, especially, are our government, so they'll write the legislation as they see fit. You can take that to the bank.