How low can it go?

July 10, 2008

Footnoted regulars know that I’ve been chronicling the fate of Countrywide’s (CFC) sex party house in Holmes Beach, Fl and using it as a metaphor to explain just how serious the whole subprime mess really is. Not to mention how little Bank of America (BAC) executives seem to really get the problem.

Next Tuesday, the house will go on the auction block. And the starting price is now listed at $279K. That’s a $90K drop from just last month and considerably less than the $1.1 million that Countrywide appears to be on the hook for as Floyd Norris noted last month. Oddly enough, Countrywide’s own REO site still lists the house at $729K.

Now obviously there’s a bit of danger of taking one particularly sorry house and using that as a metaphor for the crisis. But on a day when foreclosures jumped 53% and Fannie (FNM) and Freddie (FRE) are dropping yet again, it’s hard not to view it exactly that way.

Also: just to show that the problems in that part of Florida — a place I used to call home — aren’t just limited to Countrywide, I just caught this story in my old paper: Regions Financial (RF) is looking to foreclose on an entire condominium building that has 58 units and was originally part of a 2-building development. Regions inherited the loan from AmSouth Bank, which Regions acquired in 2006.

Posted in: Disclosures, Financial, M&A

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