OK, I have a dumb question. What do the banks plan to do with

[RKP5637]

all of the foreclosed homes falling into decay, dropping to prices a fraction of their original amount. Do they just plan to sit on the land value waiting for it to appreciate forever ... redevelop the area and sell off new homes. I often wonder about this, so decided to ask what DU thinks...

[phantom power]

1. as I understand it, the mortages are usually insured...

so the bank can foreclose, collect their money via insurance, and then re-sell the property to make some additional money.

[zipplewrath]

2. You presume they have plans

There doesn't appear to be any plans at all. Some day, some body will make a name for himself by moving alot of the property "off the books". Most likely through some sort of mass sale or auction to someone who will pay 10 cents on the dollar and then try to flip them some how.

[freshwest]

3. Continue writing them off as losses until they get another bailout? Sorry, I'm evil. Other DUers...

Will probably be able to give better replies, but I can't help but think they are seeking another advantage. If they were truly interested in making money on the local level, they'd have dealt fairly with those who were making payments even if they were reduced ones. Just my thought.

[msongs]

4. wait for a full price government buy out while they write off all the costs up front first thus

getting paid twice.

[JDPriestly]

18. Yes, msongs. That is what they are doing.

It is idiotic, but that is what they are doing.

[soc7]

5. Don't the banks offload them at "sheriff's auctions"?

I thought that's what they did locally in my county....

[RKP5637]

7. I think so? ... but it seems they would be losing money? ... some of them

seem to sell for far less than the loan. Maybe they take that and do a tax write off. I really have trouble wrapping my head around all of this ... if I were a banker, I would say this is a really really poor business deal. ... but my hunch is the banks are making a killing off all of this eventually by more shenanigans. Maybe the AIG bailout covered a lot of this ... I don't know.

[soc7]

11. If I understand it correctly,

Taking the loss as a write-off is better than having a huge inventory of real estate on their books.

[TheWraith]

20. Precisely. It's less of a loss to sell it cheap that way...

...than to try and maintain it long enough to sell it for anything approaching "real" value, maybe taking years to do so, maintenance, inspections, taxes, etcetera. Not to mention more bookkeepers to track what they own, and the risks of abandoned houses being taken over for illegal uses.

[hifiguy]

13. That's what happened when I was foreclosed out

of my home four years ago.

[TheWraith]

15. Sometimes they do, sometimes they don't.

But whether it's through an auction or a direct sale, they end up selling them to somebody or other, usually at a fraction of what the place is worth. Sometimes that'll be people looking for a fixer-upper, other times folks looking to "flip" a house for profit, yet other times it'll be a developer looking to tear it down and start over.

[KansDem]

6. I've read foreign investors are buying US foreclosed homes

Foreign Investors Snapping Up Cheap Homes

In most cities across the state, the story is almost the same. The enduring foreclosure crisis has resulted to declining home prices, equity loss and growing volume of distressed properties. But behind such dreary housing situation are investment opportunities waiting to be unearthed. In fact, many markets are being scoured by international buyers looking for cheap properties to invest in.

http://www.foreclosurelistingsnationwide.com/blog/article/1954/foreign-investors-snapping-up-cheap-homes

We'll be renting from them. I suppose we'll contine to pay in $US...

[RKP5637]

9. So much of what happens anymore IMO is so backward for "we the people." I was

reading/listening to something recently wherein the remark was ... forget about countries, borders and rights ... the banking systems now run the world and country borders mean little anymore, many banks being larger than countries ... that earth is being sliced up and run by the organized banking systems.

[raouldukelives]

12. Exactly.

Must keep the rents high at any cost to prop up property valuations for the 1%.

[dixiegrrrrl]

8. The mortgages were actually 'sold" to Fannie Mae and Freddie Mac in most cases.

I know my mortgage shows up on Fannie Mae books now.
The bank is just the servicer, actually.

Pres. Obama just announced a plan to sell "groups" of foreclosed houses to private investors so they can either rent them out or do whatever ( in some cases, the land is more valuable than the houses).

So the picture looks like this:

Banks foreclosed on an incredible number of homes, sold the foreclosed AND performing mortgages to the semi-government agencies Fannie and Freddie, got even more money from Timmy and the Bernank via TARP and trillions in zero interest loans,
and effectively managed to steal both our cash and private property.
Now the millions of houses will be in the hands of "private investors" ( you KNOW Carlyle Group has to be involved).

Remember that the extent of illegal foreclosures is still being revealed, not to mention the extent of fraudulent mortgages in the first place.

[RKP5637]

10. Amazing, absolutely amazing.

[dixiegrrrrl]

14. They stole our jobs, our money, our houses and priced food and energy

out of the reach of millions.
This is an intentional, deliberate, planned series of events, fueled by a Reich Wing philosophy that believes the rich are superior and "deserving" and the non-rich do not count.
It truly is a reversion back to the 1880s, if not to earlier times, when there was no social safety net, when women and minorities were to be exploited and/or left to die, if not outright killed, and all the earth's resources were to used for profit.
Within the last 20 years, programs, services, and values that took a century to build have been over turned.

Yet, strangely, I seldom hear anyone talking about the big picture, rarely hear anyone connecting the dots.

[RKP5637]

24. Yep, you really make an excellent point on "seldom hearing anyone talking

about the big picture, rarely hear anyone connecting the dots."

That seems to be a thing of the past, connecting the dots, and looking beyond the next quarter.

Even in the general populace, I don't think many connect the dots anymore, I don't think many Americans even see or understand the big picture of what's going on ... if they did, they wouldn't elect the horror show to congress that they do ... and presidents would be running on a more progressive agenda.

Many of the citizens in this country are enabling a pretty destitute future IMO.

And those in the 1% thinking they are insular to the future of what they are enabling are really really clueless.

[dixiegrrrrl]

26. "Many of the citizens in this country are enabling a pretty destitute future IMO."

Sure beats having to think, doesn't it?

[RKP5637]

27. When water is flowing over the dam, it's damn hard to stay a piece of driftwood

at the top ... well, something like that ... but I got my dams and damns right! LOL

[Johnson20]

19. If I'm not mistaken

that's exactly why Freddie and Fanny were created-to guarantee mortgages. Problem was they guaranteed many, many very risky ones partly/mostly (take your pick) due to political pressures.

[BeHereNow]

16. Rent them to the workers of "Company Store?" Like Walmart and other evil corporations?

Take part of their paychecks as rent?
Anything is possible these days.
BHN

[JDPriestly]

17. I've been wondering this too.

When I was in college, we considered the business majors to be only slightly more intelligent than those who majored in phys ed or basket-weaving.

So, your guess is as good as mine. How do really rich, really greedy, but not-very-smart people think? That's the question.

They count their beans and think that is the end of the story?

Maybe that is how they think. They certainly aren't thinking holistically. They don't seem concerned about how the empty houses fit into our human ecology, what the empty houses mean in our society.

[RKP5637]

22. Yep, that was the same at my college. Those that couldn't hack other

majors went into BA. None of them discuss/think about the "big picture." I suppose some of them think they are immune to living in a dystopia, but most top ended societies generally topple in history. Compounding that are those that never had to do anything in life, they just count their money rolling in because of the efforts of others.

[Wellstone ruled]

21. the ripoff will continue for 5-7 more years

If the mortgage was insured,the property will become the asset of the underlying insurer. They will then have a property management firm clean it and make it salable. Here in foreclosure-ville,(So.Utah)the house is then listed thru a Broker as a Repo. For people looking for a retirement home,1999-2000 prices and desert lifestyle, with a high cost of living in mostly Mormon communities,hey,we got you covered.

Banks make out like bandits on Repos,got repaid on the original,now they are writing the new paper and collecting new fees. Plus,selling the paper to Fanny and Freddie. What a deal.

[RKP5637]

23. More than a few of these jokers should be sitting behind bars IMO. I would

have let the whole thing fail. I think in the big picture we all would have been better off. ... but, there is way too much money and shenanigans in politics to have let that happen.

[lonestarnot]

25. Sell them to investors or to whom they can sell them. Not hurting them any.

They haven't lost anything on them yet.