BUFFETT/ BANK OF AMERICA/ MITIGATION FIASCO!

Is that Warren Buffett or Jimmy Buffett investing in bank of America? A young drunk Jimmy Buffett might invest in Bank of America, the older one would not. So it must be Warren Buffett. Are you serious? He should have spoken with one of the thousands of real estate investors, agents and short sale negotiators, who try to deal with B of A before he threw his good money into one of the most inefficiently run companies in the world.

Many very experienced investors and negotiators will not seriously consider an attempted purchase of a Bank of America distressed property. Part of the reason is their fault and part is beyond their control.

When Bank of America purchased Countrywide they really got a bag of bull sh-t. The Countrywide loans are a poisonous swill and, if you have ever attempted to purchase one of these proprieties via a short sale from Bank of America, than you know that they often cannot be significantly discounted. On top of that Bank of America/s short sale department is woefully inept.

The natural result of these two factors is Bank of America carrying a huge number of distressed properties on its books. Competent real estate investors have little interest in buying these properties, because they either can not be significantly discounted, or, Bank of America is so inflexible and disorganized that you can not get an offer approved in a timely fashion. Too big to fail, is also too big to succeed.

For Bank of America to rise from the ashes like a Phoenix it will need the cooperation of the government in discounting the numerous Countrywide loans to permit real estate investors to buy them and, re position them so they can enter into the market again. It will also require Bank of America to reorganize its mitigation efforts, to become user friendly, instead of  difficult to work with. In all fairness to Bank of America Chase and many other of the lenders are just as difficult and inefficient to work with, when trying to short sale their properties.

It is clear that the economic crisis and the great recession (really a depression) will not subside until the housing market is stabilized. The housing market will not be stabilized until the distressed property inventories at the banks are liquidated and the real estate market resets. At the current pace, and with the current management, the end appears no where in sight.