Selectively buying toxic assets? (auctions, foreclosure, investment, housing)

[glenn_1000]

With the new "Public-Private Investment Program" passed today, will it be possible for outside investors to select which toxic assets they invest in? They are saying something like fifty cents or so on the dollar. I wonder if they will be able to look into each package of bad sub-prime loans and decide which one to buy? With people already coming from other countries to buy low priced homes in foreclosure auctions as an investment, this would give them another way to invest in our housing crisis. I wonder if it could affect how many bank owned homes hit the market at low prices in the future? Hope not too much since I am looking to buy my first home soon.

[aneftp]

Originally Posted by glenn_1000

With the new "Public-Private Investment Program" passed today, will it be possible for outside investors to select which toxic assets they invest in? They are saying something like fifty cents or so on the dollar. I wonder if they will be able to look into each package of bad sub-prime loans and decide which one to buy? With people already coming from other countries to buy low priced homes in foreclosure auctions as an investment, this would give them another way to invest in our housing crisis. I wonder if it could affect how many bank owned homes hit the market at low prices in the future? Hope not too much since I am looking to buy my first home soon.

It's very difficult to know what you are buying. What they are proposing is like these real estate auctions you see. They give you a list but never let you get inside the property to truly evaluate the costs.

So these toxic assets that you are buying 50 cents on the dollar may truly have a 80 percent default rate and you could lose more money (along with the government sharing the costs).

What investors want to buy are toxic assets 50 cents on the dollar that have less than 10 percent default.

[texdav]

No. The first requirement is that you have managing control of 10 billion dollars in assets. Then they will be sold in packaged lots they were bought in. This means that hedge funds and other large investors will be the ones in the game.How not all these homes in those packages will be toxic as 85% of people are making their payments.This will mean that they will decide just what those property in the packages are indivdually worth. That wll sometime and will end up taking a huge number off the market,It also allows investors to actaully make deals that will enable many to stay in their homes because of the 100 billion in subsidy for doing this.This is very likely to bring alot of money off the sidelines.Obama finally decided not to privtise the banks it looks like and let the market value the asets and remove the asets from banks plus stabalize the housing prices.Several huge hedge funds have already said they are in.

[glenn_1000]

I heard some speculation that it could be made into a fund so anyone could purchase shares, a way to invest in America. So who would be handling each property after the asset is unloaded? Would the bank that made the loan originally? Someone will have to try and get the bank owned property sold again.