Asset Management companies are not having a good year. From top ranked Goldman Sachs (Which has reported in April of 2009 $110us billion in cash, but with trillions in loans outstanding in the world??) Trading at $100 less than its 52 week high to lower ranked GE (Asset Management) being pummeled in the stock market, just about every company in the sector is hurting.

Asset management firms are known for providing professional financial services to companies all over the world. Of course the guiding principal of asset management firms is to help their clients manage their assets in a way that allows them to achieve their financial goals. However, today, it’s the asset management companies that need the help.
Many of these companies got stuck holding virtually worthless mortgage backed securities and are now facing the brunt of owning assets that have free fallen in value. To make matters worse, their clients now need to dispose of these assets- namely residential real estate. Their clients include mortgage lending companies such as Countrywide to traditional banks such as Citi or Bank of America and other institutional investors like pension funds. All have been hard hit by the real estate –credit meltdown. The valuation of the real estate and other assets seems to be dwindling by the day.

Asset Management companies and their clients are having trouble even keeping up with the real estate market in the United States with a staggering number of foreclosures. Housing and commercial prices have tumbled. Commercial real estate values have dropped 20-25% in many large markets. With credit markets frozen, if nothing happens to increase the flow of lending, transaction volume itself could drop 40% in 2009.

Residential real estate value has dropped of 60% or more in some markets like California. In some markets like Palm Springs, 85%-90% of all sales in early 2009 have been foreclosed homes. Even the President’s new housing bill will not help that many homeowners, so the burden of foreclosures will not be leaving the market anytime soon. The $75 billion dollar plan will allow some homeowners to refinance, but it’s limited to borrowers who owe up to 5% more than their home’s current value. That won’t help much in states like California, Florida, Michigan and Arizona, the hardest hit states with severe foreclosure rates.
The Federal Reserve’s Beige Book which tacks business activity in the nation predicts a bleak outlook without any economic growth until late 2009 at the earliest and perhaps into 2010.There are many factors contributing to the stalled economy, including jobs, which is also contributing to the high foreclosure rate. However, until the wave of foreclosures is over and the significant excess inventory is sold, there will not be a strong economic recovery. In the meantime, the vicious cycle remains. Banks and asset companies now own the massive number of foreclosures. Steve Preston, secretary of the US Department of Housing and Urban Development said “we expect to see 2 million foreclosures this year.” That equates to about a 1/3 of all project home sales in 2009. The overwhelming supply will continue to drive down prices.

Another scary note-worthy item is that not all of the current foreclosed properties are not even listed yet in the broker used multiple listing service, which is the software platform realtors and brokers use to know which properties are for sale. RealtyTrac, an online marketer of foreclosed properties, said that in four states- California, Maryland, Florida and Wisconsin that there are only one-third of the foreclosed properties actually listed in the MLS. So the mountains of foreclosures we have now could significantly increase beyond what is currently known. Lawrence Yun, chief economist for the National Association of Realtors said “many properties that should be listed in the MLS are not listed on the MLS.” Currently there is about a 12 month supply of existing houses on the market.

So the banks and asset management companies will continue to lose more and more money until they’re gone or the supply is so limited that they can begin to move prices upward. The major problem is that lenders are just not prepared for the onslaught of foreclosures that they now manage. According to RealtyTrac banks took back 860,000 homes in 2008 more than double 2007. There were over 3 million foreclosure filings in 2008. One lender in particular is trying to move fast. Tom Kelly, spokesman for Chase said their goal is to cut their losses as quickly as possible which means dropping their prices significantly. Most lenders with significant foreclosed homes in their portfolio use asset companies or other third parties to manage their foreclosure business. Today, with the sheer number of distressed properties, many agents are running to the foreclosure market. Many have no experience in dealing with foreclosed properties so the banks spend more time and money in dealing with inexperience agents and brokers.
Germany’s news publication SPIEGEL reported, “The bailout packages aimed at shoring up financial markets in Europe are getting increasingly expensive. A creeping depreciation of currency is inevitable and state (local) bankruptcies can no longer be ruled out.”Chancellor Angela Merkel stated, “There is a rumor going around that nations cannot go bankrupt. This rumor is not true.’’

However, there is a great alternative at hand. A local Southern California company, Terra Asset Management.com is an expert in liquidation risk and works to sell property to interested parties. Operating in Palm Springs, Terra Asset Managers and its partners have unique foreclosure expertise and are the leading foreclosure specialists in Southern California. Terra Asset Management.com can cut your time of sale down. Equally important, Terra can limit your liquidation risk and most importantly Terra has the resources and the relationships to get your property sold quickly.

The 4 step process of Terra Asset Management.com takes the worry off your shoulders and handles all aspects of selling the property, business, or brands.

Terra Asset Management.com is a full services real estate firm and has contractors,
CPA’s, legal and other help that may be necessary for you to sell your property.
If you are a bank of asset holder and have foreclosed homes and you need them sold, call the foreclosure experts, Terra Asset Management. Charles Stewart can be reached at (760) 408-8998. Or reolord@aol.com