We recently relocated our corporate headquarters to a new facility here in Oklahoma City, after having spent almost 18 years at the same office property. As part of that process, I was cleaning out my desk and stumbled across an interesting quotation from Lamar Kelly, who was responsible for leading and supervising the Asset Management and Sales division of the Resolution Trust Corp., including the management of a 4,500-person staff that managed and disposed of more than $450 billion in assets, back in the early to mid-1990s. Speaking to loan sales at the time, he said he was seeing: "What we see is the elimination of the large overhead of real estate and real estate-related loans that were in those institutions. Those assets are back in the hands of the private sector where they belong."

It's surprising how relevant this statement is today, some 20-odd years later. We are now in the midst of yet another clearing process, with the private sector leading the charge. And while we've learned certain lessons since the last downturn, there are still some speed bumps ahead. As it stands, the FDIC probably still retains anywhere between $35 billion and $40 billion in assets, which will ultimately need to be sold off. But, clearly, this isn't going to happen overnight.

Part of the problem with dispensing loan pools is that bankers are trying to balance their loan-loss reserves, which means they need to write down their book values each quarter. Oftentimes, investors will express frustration because the banks aren't willing to sell their loans. One of the prevailing theories for this is that bankers don't understand the value of their loans, but I beg to differ. Most of the bankers do, in fact, clearly understand what has happened to the value of their loan product. However, they can't take the loss until they get the loan down to a level where the book value and market prices are in accord. So it takes time for a situation to occur where the amount a group of investors is willing to pay for whole loan products meets up with what the bank can accept.