Bulldoze: The New Way Banks Foreclose

[joeybee12]

Banks have a new remedy to America's ailing housing market: Bulldozers.

There are nearly 1.7 million homes in the U.S. in some state of foreclosure. Banks already own some of these homes and will soon have repossessed many more. Many housing economists worry that near constant stream of home sales from banks could keep housing prices down for years to come. But what if some of those homes never hit the market.

Increasingly, it appears banks are turning to demolition teams instead of realtors to rid them of their least valuable repossessed homes. Last month, Bank of American announced plans to demolish 100 foreclosed homes in the Cleveland area. The land is then going to be donated back to the local government authorities. BofA says the recent donations in Cleveland are part of a larger plan to rid itself of its least saleable properties, many of which, according to a company spokesperson, are worth less than $10,000. BofA has already donated 100 homes in Detroit and 150 in Chicago, and may add as many as nine more cities by the end of the year.

http://news.yahoo.com/bulldoze-way-foreclose-102000063.html

[KurtNYC]

1. I have a lot next to me where a house burned and was never

rebuilt. The city owns the land and it is now a mini park. Not so bad really.

[snooper2]

2. I'm not seeing the downside of this, until somebody says let somebody who lost a house

move in there! Which will happen in this thread...



but when pipes are stolen, whole rotted staircases- better to demo and give land back to the city. Not to mention insurance issues-

[KamaAina]

3. Couldn't they just donate the houses to the city and skip the bulldozers?

I'm sure there are lots of homeless people in these cities who could benefit.

[TalkingDog]

5. That's my take. Make it a sweat equity deal, like Habitat.

But if the properties are only valued at 10K they are probably beyond the sweat equity solution.

[thereismore]

6. It would lower property values around such "poor houses". Can't have that. nt

[MineralMan]

7. Most of the houses this is being done to are unlivable.

They've been stripped of plumbing and wiring and are unsafe to occupy. The city would have to bulldoze them, at the taxpayers' expense. Better the lender does it and save the city the money.

[MineralMan]

4. Well, that's one way to remove unsalable houses from

the market, and that will help with median home prices. At some point, the cost of dealing with dilapidated costs exceeds the price the lenders can get for them. Still, the whole thing is a shame. They could have just let the owners keep the homes and write off the mortgage. They're writing off the mortgage in any case.