Banks not taking houses post-foreclosure = shadow inventory threatening economy

[Trendytrader]

Quote from marketsurfer:

i know several who have and are living in million dollar plus homes and haven't made a payment in 2 years.

the question is, when will the dislocation finally occur? will property be reset to a very low valuation by governmental action OR what will finally happen?

When all of the banks shit is finally removed from the FED books.....no wonder the FED doesn't want to anyone to look at what they swapped for treasury bonds.

 

[Rickshaw Man]

If it goes to foreclosure the county get involved calls the sheriff to post the notice. I think the bank must then recognize it as a non performing asset. This will further weaken there balance sheet.

 

[MattF]

Quote from bidask:

what does this mean? are people able to just continue living the their houses because the bank isn't taking possession of them? the people are getting the foreclosure notice but they can just ignore it because there's no enforcement?

Unless the notice has an actual date for the sheriff sale/auction (which even then could be postponed if negotiated or what have you), then yes.

Average, AVERAGE right now for the whole process to finish from the first missed payment is 9-12 months..on EVERY file.

 

[northmen202]

All of the government programs to help people stay in their homes have been a joke.There is no teeth in any of these programs.

When big government bails out Wall street and doles out trillions in corporate welfare it's considered good sound business.

When government helps the common man it's considered socialism.

My right wing neighbor who is so afraid of the government health care calling it communist, just had a major heart operation paid for by Medicare & Medicade.

 

[MattF]

Quote from StockBagger:

A friend of mine in Denver, Co. has been living rent free for 15 months now.

He has a 1st and 2nd mortgage on his home. The property he paid for was 190k, its now worth under 75k. His 1st mortgage sends his quarterly statements and hes behind like 30k plus in mortgage payments. His 2nd calls him from time to time but they have a worthless piece of IOU from him because if they foreclosed, the 1st gets the money and would take all of it and the 2nd is holding its hand on its ass.

Hes in a win win situation because if they do eventually foreclose he still has at least 6-12 months before he would have to get out!

Fucker lives rent free! One other thing, he has 3 roomates and charges them 250 each, thats 750 in his pocket + no mortgage paying! Just incredible!!! This shit never happens to me!

Smart...why WOULD you pay on that?

Hope he at least tucks something aside though...enough down the road would allow him to get another home even with the FC; you have enough cash down and can prove you make monthly payments OK? Sure!

 

[MattF]

Quote from IanMacQuaide:

To add to that, anecdotally:
I remember reading, last winter, I think in a post by you, BLSH, that banks couldn't pay for the snow to be shoveled off the sidewalks and driveways of many foreclosed homes in the snow-belt, and were getting fined by municipalities.
The banks also couldn't pay the fines.
This is getting interesting.

you can fine/lien the hell out of a property, but once it's sold the municipality will likely negotiate it off to little to nothing in exchange for it back on the property tax rolls.

 

[MattF]

Quote from ByLoSellHi:

"Never, ever, ever listed to real estate brokers or agents when it comes to bank owned real estate. 99% of them are the most incompetent sources of information you could possibly find. The few who aren't incompetent are unavailable to the general public, and you'll never hear from them publicly or privately."

+1. Many are regular realtors. Sad but true. Lots got brainwashed into selling this stuff the same way for years (when it kept going up)...now they don't have a clue on what to do....except hope?

 

[ByLoSellHi]

Quote from northmen202:

All of the government programs to help people stay in their homes have been a joke.There is no teeth in any of these programs.

When big government bails out Wall street and doles out trillions in corporate welfare it's considered good sound business.

When government helps the common man it's considered socialism.

My right wing neighbor who is so afraid of the government health care calling it communist, just had a major heart operation paid for by Medicare & Medicade.

We're privatizing profits and socializing losses in American, and a hell of a job at it...

 

[wartrace]

It's a shame that people can't seem to express themselves without resorting to vulgar language. I was going to share this thread with a couple of forums I frequent but am not able to because of your vulgar language.

Yes, I can cuss. I am a former marine and have heard it all but why do people INSIST on typing it into their responses? Low class? Lack of a functioning vocabulary? Immaturity? It really is pitiful.

(not your post bilo, hell isn't too terrible)

 

[mgabriel01]

Quote from rallydog:

Bidask, I have listings where the owner hasn’t made a payment in over a year and there is still no notice of default let alone a notice of sale. How can this be? Some of the banks are just so overwhelmed that incredibly, they haven’t been able to “get around to it” yet. If BAC were to foreclose on all of the properties that are behind in their payments it would swamp the market with new listings driving down prices even further. Hence the “shadow inventory”.

The banks have been bailed out to ward off a collapse now they’re praying for a recovery in the economy.

As bad as that sounds, listen to this; banks have tightened lending standards and it is harder to qualify buyers to buy these homes. Normally that’s okay but it still leaves a supply demand imbalance in the housing market that is going to be with us for a while.

This is very true. Im a mortgage broker on the east coast - and the big mortgage lenders - Wells, BAC, 53, Amtrust - get new underwriting guidelines almost weekly

they are only writing loans to gold-plated borrowers - and even then I wonder what they fuck theyre thinking