The Case for RTC II (“RTC²?”)

It seems increasingly apparent — at least to this observer — that what lies in our collective future is some sort of successor to The Resolution Trust Corporation (“RTC”).

It was the RTC, of course, that successfully dealt with (and disposed of) all the foreclosed commercial properties left in the wake of the late 1980’s S&L bust.

Except that, this time around, the number of properties likely to be sold numbers in the hundreds of thousands (vs. thousands of properties and loans bundled by the RTC, albeit of much larger average value). 

So, call today’s version “RTC²” or even “RTC³.”

Job Description:  Foreclosure Clearinghouse

By any name, there’s an obvious, urgent role for the new entity to play:  to identify, consolidate, and expeditiously dispose of all the foreclosed homes sitting on banks’ balance sheets.

In other words, to do what the banks manifestly can’t or won’t do themselves, on any reasonable kind of timetable.

Five years into the housing downturn, it’s apparent that banks are either:  a) not logistically equipped to liquidate their foreclosures; b) not sufficiently motivated; or c) both a. and b. (the likeliest choice).


Government should do it for them.

Rebutting Critics

To critics who are certain to scream “Socialism!,” these two thoughts:  just who do you think is financing — directly or indirectly — 98.9% of all U.S. mortgages at the moment?

Far from killing off the now-moribund housing and mortgage market, RTC II will resuscitate it.

Thought #2:  the role of RTC II, just like RTC I, is to be circumscribed and time-limited.

No shadow deals, no political favorites, no games — just a transparent, public market designed to fetch the best, possible price(s).

Once private Buyers have stepped up to purchase the nation’s backlog of foreclosed homes — and at attractive enough prices, they will — it is to go out of business.

Which is not a little ironic, given the continued existence of the too-big-to-fail banks (still) thwarting the housing market’s recovery.

P.S.:  William Seidman, who was instrumental in the success of RTC I, ranks just a peg below Paul Volcker in patriotic, inspired service to this country.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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