Warren Buffett Says This Is Economic "Pear Harbor"
Market News & Commentary by Chris McLaughlin, October 2, 2008
http://www.shortsalesriches.com/welcome.html
The Dow Jones Industrial continued to slide again today, down 344 points, despite progress on the bailout in Congress. The U.S. Senate voted 74-25 last night to approve a more palatable bailout plan that was presented to voters. Both Senators Obama and McCain voted in favor of the bill. Chief among the new provisions will be increasing FDIC insurance to $250,000 from $100,000. The bill prevents the FDIC from charging its member banks more in order to cover the increase as well and enables the FDIC to borrow directly from the Treasury should it need additional capital.
But investors were rattled by comments made by legendary investor Warren Buffett. Buffett said the economy is suffering from the same thing that brought the United States into War World II back on December 7, 1941. "This really is an economic Pearl Harbor," Buffett said. "That sounds melodramatic, but I've never used that phrase before. And this really is one.... In my adult lifetime, I don't think I've ever seen people as fearful economically as they are now," the Oracle of Omaha commented.
Now on to our real estate market commentary...
The savvy short sale investor knows that information is the cornerstone to finding the best deals so here is a new twist on an old method of finding potential properties. Traditionally, locating short sale opportunities centered on locating distressed home owners but with the economic crisis in full swing, stalking sick banks is increasingly becoming a viable option. In fact, an entire range of corporations, investment funds, trusts and other entities increasingly need to liquidate positions to raise capital and/or remove non-performing "assets" from their balance sheets.
One little known source that is a veritable gold mine for sick bank stalkers is the Federal Deposit Insurance Corporation or FDIC. Yes, the illustrious name behind the scenes is increasingly going public with their warnings, enforcement actions and other administrative admonishments leveled against institutions, corporations and even individuals.
To get in on the action, contact the FDIC's Public Information Center by calling 877.275.3342 to request a copy of the "Enforcement Action Report." Generally published monthly, it may take time to sort through the mundane admonishments to find the valuable nuggets of real information.
The FDIC also publishes an ongoing list, as well as email notification, of failed banks free for the taking. Simply visit http://www.fdic.gov/bank/individual/failed/banklist.html and sign up.
Finally, the last great FDIC resource that every short sale investor will want to bookmark is the contact information for obtaining a "Release of Lien" for a failed bank, Savings and Loan or other financial entity. As you know, obtaining a release of lien is required when selling but for those homeowners involved with a failed financial institution or one that is a subsidiary of a failed bank, the process isn't always so straightforward.
To find out if the bank or financial institution failed or is a subsidiary of a failed bank, call the DRR Customer Service Center at 888.206.4662.
To request a Release of Lien for a property that was originally financed with a now defunct lender, put the request in writing and send to FDIC, 1601 Bryan Street, Dallas TX 75201 Attention: DRR Customer Service Center/Bryan or e-mail your request to: cservicefdicdal@fdic.gov OR it can be faxed to 703-812-1082 along with a $50 fee. You may also use www.pay.gov to expedite payment and processing.
More tomorrow...
Chris McLaughlin, J.D., M.B.A.
web: http://www.shortsalesriches.com/welcome.html
e-mail: info@shortsalesriches.com
Phone: (800) 452-7627
P.S.:
So we're going to do it again tonight (Thursday) at 7PM EST, 4 PM PST. I received lots of e-mails from the East Coast begging for an earlier time, so here you have it! We're hosting a Webinar (you need a computer and a phone to participate). So if you're interested in learning how to make money in this market jump on this now and register for f.ree while we still have openings:
https://www2.gotomeeting.com/register/779139540
P.P.S.: If you want to have a great laugh, check out this latest YouTube video about Nathan's autopilot system where he doesn't talk to banks, doesn't talk to sellers, and doesn't talk to buyer. What does he do? Click here to find out:
http://www.youtube.com/watch?v=QsOLmgTY--U
and if you like what you see in the video, then go here and take action:
http://www.shortsalesriches.com/welcome.html
