I read an excellent piece this morning in the New York Times written by Greg Smith about why he was leaving Goldman Sachs. In short, he says it’s become too sleazy as short-term profit motives are now trumping all other considerations.
In the past 2.5 years I’ve been investing in real estate in my home town Pueblo, Colorado. What I’ve found is that large banks are dragging out the foreclosure process so that homes are left vacant for 18 months or more. This is bad for everyone.
- It’s bad for the banks because while the homes sit vacant they deteriorate and lose value.
- It’s bad for the neighborhood because it drives down prices and vacant homes invite criminal activity.
- It’s bad for local government because the value decline results in lower revenue while additional criminal activity requires higher expenditures.
- It’s bad for investors and prospective buyers because they have to spend more money on repairs.
- It’s bad for renters because the reduced housing inventory decreases supply and drives up rental costs.