About two months ago I wrote a post that included information from a monthly magazine, Collections & CREDIT RISK (sic), I read religiously. I like the magazine because it gives me a more clear picture on the credit industry given the article writers are industry insiders.
I received my January 2009 edition this past Monday and found some interesting perspectives about the coming year. I thought I would share them with you and let you ponder them to see if they jive with your thoughts.
Credit Industry Tones
Darren Waggoner is the editor and writes a column called editor’s letter. In this edition he quotes the results of an informal poll the magazine ran this past year. He says the tone of the response from the readers is summed up thusly:
The impact with Obama and a Democratic-led Congress will be horrific to our industry (credit and collections). Those fortunate to survive this recession will then be faced with more regulations. Consumer advocates will thrive and collection agencies will be riddled with compliance and regulations that will literally render us ineffective.
As I read those words, I had to ask myself why the big worry? Nobody with oversight authority has done anything so far to enforce the already in existence regulations and laws that govern credit and collections. I’m thinking 2009 won’t be horrific for the industry worker bees, it’ll be horrific for the average working stiff consumer.
Credit Card Charge-Offs And Housing Prices
Another article in this issue quotes Daniel Ludwig who is president and chief executive officer of debt broker National Loan Exchange, Inc. as saying newly charged-off credit card accounts are currently fetching about 7 cents on the dollar, on average. So I said to myself, if this is true of credit cards, I bet it is true of real estate as well. Not that real estate is selling for 7 cents on the dollar but it is selling at discounted prices and will continue to sell at discounted prices.
I took Mr. Ludwig’s remarks as reinforcement that great real estate deals are not only here but will be thrust upon us during 2009. You can say I’m stretching a point but in previous articles in the magazine the correlation to credit card debt and housing prices was laid out with clarity. I leave it to you to accept or reject this thought theology.
Finally, Darren Waggoner sums up John Q. Public’s sentiments by saying (s)he is bitter, bleak, scared, angry and on edge. Who can blame the public for being anyone of these, right? On the other hand, if you are a real estate investor, can you really afford to be any of these? I don’t think so. In fact, at least according to me, if you are happy, positive, open minded and have a plan, you should do very well in 2009.
Here’s wishing you and yours a very happy new year and huge success in your endeavors.