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> mortgages are secured against a physical piece of property that will almost always retain a significant portion of the original value. REO is incredibly cost
by ryanmarsh 10y ago
> mortgages are secured against a physical piece of property that will almost always retain a significant portion of the original value.
REO is incredibly costly and moving a house off the books cannot happen quickly especially in a down market.
Cars are better in that way.
Most people will be upside down in their car loan but there's an international market for cars. It's pretty easy to liquidate a used car and capture some capital in the short term. Try that with a $450,000 McMansion.
- TheSpiceIsLife 10y agoDon't they just auction the place with no reserve? That's what I though happened to repossed houses. I could be wrong here. Chances are someome will take out a new loan with one of the big banks to finance their new purchase. The bank gets to keep all the money already paid in by the original lender anyway.
- wheelerwj 10y agoyou don't have to liquidate a 450k mcmansion, you just have to wait.