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Dr Doom

Banks Buying Back Distressed Properties Through Shell Companies

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i've been tipped off by a surveyor I know that this is happening,

and he was told it by an estate agent

our theory is that the people in trouble basically have no equity, so creating

a false boom with this very underhand trick will suck in more of the money

of cash/equity rich buyers sitting on the sidelines waiting for the bottom

seems very enron-esque, i'm sure if this is true it would make a very interesting

newspaper story

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i mean rather than taking possession themselves, they're funnelling money to other intermediaries,

which will purchase the property from the numpty defaulting on the mortgage for an artificially inflated

price, which keeps the default off the balance sheet, makes the stats look good, and creates the

artificial mini boom,

and i'm theorising that there is some overall strategy here to unload once some more of the real

unencumbered cash on the sidelines is tempted back into this false recovery

what do you think ? too far fetched ?

the banks basically want all the money, they're not happy that they've just ******ed over

stupid people, they want as much of the smart money back into the property market

as possible before it all goes totally down the shitter

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i've been tipped off by a surveyor I know that this is happening,

and he was told it by an estate agent

our theory is that the people in trouble basically have no equity, so creating

a false boom with this very underhand trick will suck in more of the money

of cash/equity rich buyers sitting on the sidelines waiting for the bottom

seems very enron-esque, i'm sure if this is true it would make a very interesting

newspaper story

Banks are moving distressed assets from their balance sheets into VIEs / SPVs / SPEs that they are funding.

They have avoided taken mark to market losses and now only have to take impairment charges which follow different rules to mark to market.

You are right, this is very Enron-esque. Like Enron, they have opinions from their auditors that this conforms to GAAP. Like Enron, they are losing sight of the fact that hiding things which will be revealed eventually is much more damaging than revealing them when the problems first occur.

I know that they have done this with distressed financial assets. I was not aware that they were also doing this with distressed physical assets.

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Need more detail on this.

Are they leaving the borrowers in the properties?

Not sure if they are leaving the same person in the property, but I was told

that they were buying them back to rent them out.

Which will have the added consequence of bringing down rents even further.

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Banks are moving distressed assets from their balance sheets into VIEs / SPVs / SPEs that they are funding.

They have avoided taken mark to market losses and now only have to take impairment charges which follow different rules to mark to market.

You are right, this is very Enron-esque. Like Enron, they have opinions from their auditors that this conforms to GAAP. Like Enron, they are losing sight of the fact that hiding things which will be revealed eventually is much more damaging than revealing them when the problems first occur.

I know that they have done this with distressed financial assets. I was not aware that they were also doing this with distressed physical assets.

and its probably not true.

to fund this, they have to A, BUY the place which means funding another entity, its staff, its contracts and so on and B take the loss on their own books. double bubble.

they would also be open to serious losses if the borrower found out....I mean...no conflict of interest there...

whats the point?

they can write off losses against tax and close a deal quickly.

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this is all part of the CRE unwind and is entirely in keeping with govt/bank reactions to the crisis thus far.

the highlighted bit is just so true.all they are doing is undermining peoples faith in the market and the rule of law(not saying it's illegal per se) but when taken in conjunction with other dubious balance sheet practices,it doesn't give investors a grreat deal of confidence.

I thought most of the Of balance sheet issues were from US properties....why would buying bankrupt stock help them one jot?

banks into BTL? give it a rest.

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Guest KingCharles1st

Who wud'a thought it..... :rolleyes:

how many ******ing times can they recycle the same debt?

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and its probably not true.

to fund this, they have to A, BUY the place which means funding another entity, its staff, its contracts and so on and B take the loss on their own books. double bubble.

they would also be open to serious losses if the borrower found out....I mean...no conflict of interest there...

whats the point?

they can write off losses against tax and close a deal quickly.

Agreed.

Mechanically, it would be difficult to do the same things with houses as they have done with financial assets so it is unlikely that they have extended the lie from financial assets to housing.

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i'm going to try and get some more solid details about this because i think it basically amounts

to institutional market manipulation / fraud, but in the clear light of day

another part of the theory was that this might be where the QE money is being funnelled

(it has to go somewhere)

media/police/general public would surely be interested, and would hopefully destroy what little

credibility these rotten institutions have left

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i'm going to try and get some more solid details about this because i think it basically amounts

to institutional market manipulation / fraud, but in the clear light of day

another part of the theory was that this might be where the QE money is being funnelled

(it has to go somewhere)

media/police/general public would surely be interested, and would hopefully destroy what little

credibility these rotten institutions have left

QE, its possible, but 125bn buys a lot of houses.....about 150,000

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QE, its possible, but 125bn buys a lot of houses.....about 150,000

If you think about it they wouldn't need to buy so many houses, just enough to make the stats

rise and kick-start market sentiment to pull in more of the remaining money.

I'm thinking what is happening in the market is so unprecedented the natural bull trap didn't happen,

so they thought they ought to create one, to minimise the banks ultimate losses,

and maximise those of the general public.

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If you think about it they wouldn't need to buy so many houses, just enough to make the stats

rise and kick-start market sentiment to pull in more of the remaining money.

I'm thinking what is happening in the market is so unprecedented the natural bull trap didn't happen,

so they thought they ought to create one, to minimise the banks ultimate losses,

and maximise those of the general public.

bull trap not happened? its happening...indices are up ( course they dont include cash sales and auctions, nor improvements to properties)

As some say, only the good stuff is moving.

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bull trap not happened? its happening...indices are up ( course they dont include cash sales and auctions, nor improvements to properties)

As some say, only the good stuff is moving.

I'm saying maybe it wasn't happening, until they started making it happen.

There is a lot of money still on the sidelines waiting for the bottom,

the rising indices will send a false signal to these people that now is the time

to put their money back in. Which would make the indices rise further

until the inward flow slows, and sentiment changes downward again.

For the final catastrophic drop.

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i'm going to try and get some more solid details about this because i think it basically amounts

to institutional market manipulation / fraud, but in the clear light of day

another part of the theory was that this might be where the QE money is being funnelled

(it has to go somewhere)

media/police/general public would surely be interested, and would hopefully destroy what little

credibility these rotten institutions have left

You would think so, but then QE seems the same thing as counterfeiting money to me.

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I'm saying maybe it wasn't happening, until they started making it happen.

There is a lot of money still on the sidelines waiting for the bottom,

the rising indices will send a false signal to these people that now is the time

to put their money back in. Which would make the indices rise further

until the inward flow slows, and sentiment changes downward again.

For the final catastrophic drop.

from what ive read hear and in books ive read since the crisis began, it appears that every bubble in history has presented people with a second and sometimes a third opportunity to lose money.

some say...its different this time.

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and its probably not true.

to fund this, they have to A, BUY the place which means funding another entity, its staff, its contracts and so on and B take the loss on their own books. double bubble.

they would also be open to serious losses if the borrower found out....I mean...no conflict of interest there...

whats the point?

What's the point? They take a bit of a loss now and they take the rest of the loss later when business conditions improve (and this loss can spread out as well).

they can write off losses against tax and close a deal quickly.

Only really works if they are making a profit at the moment..

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Northern Wreck.

Other examples of a more cavalier approach to management also began to emerge. In March last year, he and other executives decided to book an extra £39m profit by selling an "insurance policy" - known technically as an interest rate swap - which was meant to protect the bank against rising interest rates and which could have lessened the effects of the worldwide credit crunch. In June, the bank set up a subsidiary called Kielder Property Management to buy its customers' repossessed homes, potentially profiting from their woes. Others in the industry shied away from such practices.

http://www.telegraph.co.uk/finance/newsbys...-Rock-risk.html

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i mean rather than taking possession themselves, they're funnelling money to other intermediaries,

which will purchase the property from the numpty defaulting on the mortgage for an artificially inflated

price, which keeps the default off the balance sheet, makes the stats look good, and creates the

artificial mini boom,

and i'm theorising that there is some overall strategy here to unload once some more of the real

unencumbered cash on the sidelines is tempted back into this false recovery

what do you think ? too far fetched ?

the banks basically want all the money, they're not happy that they've just ******ed over

stupid people, they want as much of the smart money back into the property market

as possible before it all goes totally down the shitter

No!

Yonks ago, we looked into who owned certain 'chains' of estate agencies - it was STILL the Banks/Building societies/Financial institutions 'behind the scenes'!

That's why loads more haven't gone bust and house prices haven't 'naturally' crashed in a real slump.

EVERYTHING is completely MANIPULATED!

Your latest 'revelation' does'nt surprise me one bit!

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KIELDER PROPERTY MANAGEMENT LTD

Registered Number: 06295029 - Registered at Companies House on 27/06/2007

Address: GROUP LEGAL DEPARTMENT

NORTHERN ROCK HOUSE

NEWCASTLE UPON TYNE

NE3 4PL

Company Type: Private Limited with share capital ?

Company Status: Non-trading company ?

Last Accounts Analysed: For the period ending -

Useful links: Location map and aerial photograph

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from what ive read hear and in books ive read since the crisis began, it appears that every bubble in history has presented people with a second and sometimes a third opportunity to lose money.

some say...its different this time.

From what I have seen, every collapse after a bubble gives those trapped with devaluing "assets" a second and sometimes third chance to sell before they get wiped out.

The second chance was in October 2007 after we recovered from the August 2007 "problem".

This is the improbable third chance.

Although some do say ...... It's different this time ..... They think that we will recover from the bursting of the bubble without too much damage being done and that those who held on will be rewarded for their patience .....

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I've got the address now of a flat that has supposedly been transferred in this way in November 2008.

But it doesn't appear in the freely available land reg stats.

I'll do a search tomorrow to see what the title deeds show, I'm guessing it will be a similar type of

shell company set up by a different bank.

Is there anyway they can legally keep the title deed owner off the land reg records ?

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