Thursday, June 04, 2009

Leading by Example

Treasury Secretary Timothy Geithner bought this house on the left in 2004 for just over $1.6 million dollars. Now that he's living in D.C., he put the house up for sale. Bad timing Mr. Secretary. After reducing the price on his house to less than he paid for it, Geithner still couldn't find the next greater fool to buy it. Originally listed at $1.635 million in February of 2009, Geithner dropped the price to a mere $1.575 million. Unable to sell the house- even at a loss- the Secretary of the Treasury is reported to have rented out the house, for $7,500 a month.

But it gets better. Mr. Geithner has two mortgages on the property, totalling $1.25 million, plus a $27,000 annual property tax bill, plus home owner's insurance. I highly suspect he is cash flow negative.

Now I would have hoped that the person in charge of the Treasury, and a key figure in solving the housing crisis, would not become part of the problem himself. Unable to sell with two mortgages, cash flow negative, and an absentee landlord. What's going to happen when he owes more on the mortgages than it's worth?

Did I forget to mention estimates the house is worth $1.366 million and AOL Real Estate values it at ............$1.185 million?

Can he apply for a bailout?


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