To the shareholders of Bank __X__,
Thank you for allowing me to buy your house for our offering price. I know that you could have made $2k more by going with a riskier buyer, but you lost a few more dollars and went with the sure bet. Obviously you have already lost a lot of money following risky deals, so maybe $2k wasn't all that much to lose on the last leg. It all started when you gave a loan to a significantly underqualified buyer. My guess was that it was a subprime loan with a 6-month ARM. Maybe there were multiple families who occupied the house and they pooled their W-2s to qualify. With the increasing prices in the area, I am sure that $450k for a 1480 sqft, 4 bed, 2 bath house seemed like a good buy. They were trustworthy buyers, so they could make the payments when the rate reset. Oh, wait, they couldn't.
Fast forward to June 2008. There is a glut of houses on the market. Potential buyers are having a difficult time qualifying for loans. Housing prices in some markets have dropped 25%. But you bought a house that was super inflated in value. You lose over 60% of value. What is another $2k when you already lost $250k.
Gratefully yours,
One happy Bowtie Professor
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4 comments:
Yay, Bank X! I'm so happy for you and your wonderful family.
Yea! Congrats. You'll have to have R email us your new address and maybe someday we'll make it to CA to visit. Meanwhile, we'll have to come up with a list of fun stuff to do in our part of CA.
so, let's see pictures of this house!!!!! congrats. very exciting.
Welcome to the hood.
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