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Real estate managment companies at best charge 10% but since their is no income the fees are usually negotiated. When a home owner goes into default & a bank also walks away usually the property tax collector slaps a lien on the property for unpaid taxes. Depending on the county the tax collector can take the property and sell it at auction if the lender doesn't bid on it (usually for the back taxes).
Interesting, but I don't quite get it.
1) Why not renegotiate the loan with the owner who might not be able to pay current payments? Even 60-70% return is better then nothing.
2) If owner cannot pay, why not sell a $500K home for $250-300k? Isn't that better then nothing? I noticed a few times that if not sold at market value, banks hold back a long time (while the property deteriorates). Why not drop the price 40-50% for a quick sell? Even today there are people with cash interested in great deals.
3) Why use outside companies for those transactions? Real estate management companies are notoriously expensive. Banks can open in-house units to deal with foreclosed real estate. Not difficult in today's market and cheaper then using external companies.
Interestingly enough, banks will prefer to consider all these bad loans and lose all the money...
Your suggestions would be a common sense approach. So, you know that won't happen.
The story has to do with slum housing only, those homes with so little value that the foreclosure process ends up costing more than the residual value of the asset.
Interesting, but I don't quite get it.
1) Why not renegotiate the loan with the owner who might not be able to pay current payments? Even 60-70% return is better then nothing.
2) If owner cannot pay, why not sell a $500K home for $250-300k? Isn't that better then nothing? I noticed a few times that if not sold at market value, banks hold back a long time (while the property deteriorates). Why not drop the price 40-50% for a quick sell? Even today there are people with cash interested in great deals.
3) Why use outside companies for those transactions? Real estate management companies are notoriously expensive. Banks can open in-house units to deal with foreclosed real estate. Not difficult in today's market and cheaper then using external companies.
Interestingly enough, banks will prefer to consider all these bad loans and lose all the money...
Because those running these banks are idiots!! These are the same guys begging Congress for money.. they just want the taxpayers and the governmnet to take care of their mess.. oh.. but they don't want gov't invovled in their business
Right now these big players inthe US are looking pretty stupid.. like GM.. and the President saying.. um..hey..why aren't you firing the guy who was at the helm when the entire thing started to tank and failed to turn it around.
So much pain could have been avoided if the banks would have worked things through from the beginning rather than let it get to this point. ..
They're idiots.. so much for America's bright economic minds
The story has to do with slum housing only, those homes with so little value that the foreclosure process ends up costing more than the residual value of the asset.
Interesting. So when people were looking for affordable housing from the get go, investors are sitting on properties rotting away, properties of blight spreading to the next neighborhood over, nobody thinks about selling the properties at a fair price in the first place???
Larger picture the market prices of real estate can be manipulated by artificially supressing what had the potential to be affordable housing. Should california ever have mass exodus, lets see what happens to your neighborhood. Detroit and Flint and Cleveland didn't start out as slums.
Oberon right now how would an average person, with money in hand to be able to repair the property, be able to obtain the property when competing with a house flipper at public auction? Toxic deeds, back taxes hidden, treachery afoot, and the wholesaler packaging that prevents individual buyers from purchasing individual properties. The story of one house bringing down a neighborhood; foreclosure situation was purchased by a consortium of lawyers who outbid my neighbors and myself. The same lawyers used by the previous owner BTW. We were outbid because our #'s were based on knowing how much it would cost to repair all that was wrong up to code, zero profit.
Will that consortium live in that house? No, they will not. They're renting it out, after they spray painted over the mold on the walls that had sustained water damage so it could pass a HUD inspection, because they make their bread and butter off HUD contracts. Armed with the knowlege of artificially repairing a house to create bogus value in it, we've let the new renters be aware. They've got a lease clause that allows them to rent to own in the future, and it will affect the bid price they make. Turns out they too were outbid by the lawyer consortium.
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