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Ironically, a lot of houses owned by banks as a result of foreclosures ("REOs") are in turn getting foreclosed for failure to pay taxes and HOA fees. Banks wer

Ironically, a lot of houses owned by banks as a result of foreclosures ("REOs") are in turn getting foreclosed for failure to pay taxes and HOA fees. Banks were/are not equipped to manage the number of properties they own as a result of foreclosures and they lack the basic infrastructure to maintain these properties not limited to paying taxes and HOA fees, but violations of certain civil statutes like failing to maintain lawns that result can result in fines upwards of hundreds of dollars per day for continued violation.

doki_pen 13y ago
This simply means that the banks should hurry up and auction the houses instead of sitting on them and waiting for their value to increase.
- will_brown 13y ago
  Agreed, but there is a lot of debate on this for the following reasons. The banks own so many homes, that there is an argument that they could flood the housing market with under priced homes which would slow the housing recovering by driving down the prices of all homes. Additionally, there is a lot of speculation that part of the $1.2 trillion stimulus packages went directly to the banks to account for the above argument and actually requires the banks to slowly release their inventory of homes in order to prevent flooding the housing market with under priced homes (again because that would continue to drive down value across the board). All that said, as mentioned above I do agree with you, because assuming banks are keeping homes off the market this only artificially keeps home prices stable, and many of those REOs are failing into disrepair. In my opinion it is better to have ownership and people in homes, even at a short term cost of flooding the market with under valued homes. After all it is the banks who originally to the risk on these loans they foreclosed on and they lost.
muzz 13y ago
Yeah because banks have no experience with things called Impound or Escrow accounts...
- toomuchtodo 13y ago
  Large servicers (Bank Of America, Chase, Wells Fargo) already have a known history of mistakenly foreclosing on the wrong houses, fucking up tax payments from escrow accounts causing legal problems for the homeowner's, etc. My father and step-mother both are mortgage underwriters. One is currently still underwriting, the other is currently working for the GSEs (Fannie and Freddie) forcing several large banks to eat the shitty mortgages they pushed on them. I can not even begin to tell you how poorly managed these large servicers are. But heh, keep on thinking they know what they're doing. If they service your mortgage, I encourage you to keep a very careful on your note.

doki_pen 13y ago

This simply means that the banks should hurry up and auction the houses instead of sitting on them and waiting for their value to increase.

will_brown 13y ago
Agreed, but there is a lot of debate on this for the following reasons. The banks own so many homes, that there is an argument that they could flood the housing market with under priced homes which would slow the housing recovering by driving down the prices of all homes. Additionally, there is a lot of speculation that part of the $1.2 trillion stimulus packages went directly to the banks to account for the above argument and actually requires the banks to slowly release their inventory of homes in order to prevent flooding the housing market with under priced homes (again because that would continue to drive down value across the board). All that said, as mentioned above I do agree with you, because assuming banks are keeping homes off the market this only artificially keeps home prices stable, and many of those REOs are failing into disrepair. In my opinion it is better to have ownership and people in homes, even at a short term cost of flooding the market with under valued homes. After all it is the banks who originally to the risk on these loans they foreclosed on and they lost.

muzz 13y ago

Yeah because banks have no experience with things called Impound or Escrow accounts...

toomuchtodo 13y ago
Large servicers (Bank Of America, Chase, Wells Fargo) already have a known history of mistakenly foreclosing on the wrong houses, fucking up tax payments from escrow accounts causing legal problems for the homeowner's, etc. My father and step-mother both are mortgage underwriters. One is currently still underwriting, the other is currently working for the GSEs (Fannie and Freddie) forcing several large banks to eat the shitty mortgages they pushed on them. I can not even begin to tell you how poorly managed these large servicers are. But heh, keep on thinking they know what they're doing. If they service your mortgage, I encourage you to keep a very careful on your note.