The Signs Are Not Good. Be Careful, Do Your Debt Workouts Now.
We recently represented a client and were deeply involved in a large million dollar workout. Part of the workout included a building with a $500,000 mortgage. We found a buyer willing to offer $325,000—a bona fide offer to purchase with financing secured. However, the bank did not even consider the offer and dismissed it out of hand. Instead, the building went to auction and resulted in a $4100 offer at auction that was accepted.
Wow!
It is amazing that the bank did not bid up to the mortgage as banks do all the time, let alone that they accepted the high bid of $4100. The bank could have taken it in for its mortgage and then sold it to a higher bidder as we had a $325,000 offer. But they did not, and instead let it go.
This is an enormous signal that the market is changing again and not going in a good direction. It is foreshadowing dangerous ground ahead. It tells us that the bank does not expect to be able to do better and we are in for another major decline if this bank is correct. The fact that no one was there to bid on the building and that the bank was willing to let it go for so little speaks loud volumes about the condition of our economy, and what it says is all bad.
Do your debt workouts; it is the only sure-fire path to survival in such times. Call us if you need help. Norm will arrange a no-obligation teleconference for us to evaluate your situation. 413-584-2581.
