White: It's a little bit of a catch phrase because it doesn't necessarily need to already be foreclosed on. There are plenty of firms that are adept and would rather buy the note at a significant discount and then cut their own deal with the borrower, foreclose themselves and manage the asset with their own expertise. It doesn't necessarily have to wait. There are all different types of situations. What I'm looking for are a couple major portfolio deals by some of the benchmark investors that people look to as the smart guys in the room. When they do a $500 million portfolio of REO and bad mortgages from XYZ lender, and that's followed by another smart investor doing something similar, that's a great signal that some of the people who tend to lead the market think that the bottom is near. Buying a one-off asset isn't the thing. You can see value in that market in a particular asset.

GlobeSt.com: Are you seeing the definition of distressed change at all?

White: There's a big difference in distress now than when I was cutting my teeth in the late 80s. Back then it was a lot of buildings that should never have been building built. We are seeing, in distress, good owners and good properties. They just have the misfortune that their mortgage is coming due and have a fairly high basis in it relative to today's market. That's something unusual. I'm very amazed at some of our clients that are very reputable, fantastic firms that are involved in some of these situations.

We're also seeing - and this is a big difference - distress in developments where the developer hasn't necessarily defaulted and left the lender holding the bag, it's the lender that defaulted. When I think of distress, I think of the mortgage. But there's a lot of property-level distress, where there are tenant bankruptcies. As retail chains go under, it puts a lot more pressure on another whole set of borrowers. That's going to be a big source of trouble this time around.

Outside of the US, we've seen whole firms taken down. Here in the US so far, there have been a few large-scale disasters, but it's mostly just certain properties and loans.

GlobeSt.com: You're not seeing any particular sector get hit harder than others?

White: Apartments, multifamily, condo space-- if you put that all together has had more than its fair share of distress so far. Of course, the condo bubble burst well before the credit crunch even occurred, so there was trouble brewing there even before. A lot of them are new condo developments, and developments and land deals are the first to falter. That is a big piece. But the expectation is that retail and lodging property will probably catch up very quickly. Those are two sectors that became very highly leveraged with all of the investment that occurred in 2006 and 2007.

GlobeSt.com: Any sectors holding up better right now, like apartments?

White: Marginally, that's true, but there's a little bit of a myth behind it. It was true certainly after the credit crunch when Fannie and Freddie was keeping that market liquid, and we didn't see the same inflection point in pricing that we saw in the other property types. There is still the argument for the dislocation in the housing market with people not buying houses it should be helping occupancies. But the fact is that occupancies are declining and rents are falling in virtually every market. So the argument that apartments are doing a lot better than other property types is not true.

GlobeSt.com: How has is all of this impacting your business? Has it changed the services you have to provide clients?

White: We definitely did a quick retooling in October when it become very apparent that the name of the game was going to be troubled mortgages and distressed properties for a good period to come. Fortunately, through a lot of the same research channels-- and the research staff was seeing their deal flow down 70% -- we were seeing the foreclosures and default filings, so we started tracking that. To some extent, they're even busier right now because the sales market might be dead, but tracking all of this distress [is busy].

Clients have a lot of questions. Many of them can't be answered right now. We haven't seen any of the new funds or players in the market really step up. There really doesn't seem to be the sense of urgency to feel like they've got to be in the market buying. They're definitely curious and want information, but they're not willing to pay for it until something starts happening. There is a lot of positioning, raising money and looking at what's happening out there, and we're seeing that among the sellers, too, who are throwing huge portfolios on the market and hoping that 15% or 20% of it sells. There is a lot of price discovery??, sniffing around on both sides. But it doesn't seem that many people are finding a meeting of the minds.