Dayton Grassroots Daily Show, v 20- Foreclosures
What is the answer to the foreclosure crisis? Greg Hunter and David Esrati don’t have the answers- but, we do have a good argument about it.
The banks have been getting bailed out, should the little guy?
[youtube]https://www.youtube.com/watch?v=Xe9P-OlBGOE[/youtube]Enjoy!
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David makes a good point, compare the price fluctuation of house over the last 5 years in Las Vegas:
http://www.fhfa.gov/default.aspx?Page=86&Area=MSA&AreaID=29820&PurchaseQtr=2004Q1&ValuationQtr=2009Q2&Price=$100,000
with one in Dayton over the same period:
http://www.fhfa.gov/default.aspx?Page=86&Area=MSA&AreaID=19380&PurchaseQtr=2004Q1&ValuationQtr=2009Q2&Price=$100,000
in Dayton the changes are pretty much noise, in Las Vegas you lost 1/3 of your equity if you bought at the top.
To funny. I won’t need to argue with anyone in the comments section after watching you guys. I’m glad you disagree on things. Will watch it again tomorrow. Dexter is on my DVR and I gotta watch the season finale now. BTW – I bought a foreclosed home for cash. It cost next to nothing. (relative to home prices)
Here is one you two may have an answer for. Why do the banks foreclose the home, write down a loss, sell it at the Mont. Sheriff’s auction and then buy it back. Not sure if it’s the same bank that buys it back, guess that would be strange. But then the bank pays REO companies to maintain the home in a “saleable” state. More tomorrow.
I received a phone call from my mortgage Lender offering me a chance to refinance my loan up to 125% of my homes value at a all time low APR,! This is the kind of practices that got the housing market into trouble, is this the free money Obama was talking about?
Can somene please tell me where is the financial incentive for commercial buildings to sit empty? A couple of years ago when looking into the old Thoma Gardens Restaurant on Wayne Ave., I found they wanted $900 a month and a two-year lease on a restaurant space that has consistently folded.
Are they able to write this ridiculous price off at the end of the year?
Ok, this answers my question: http://www.realestateabc.com/homeguide/reo.htm And I was wrong. The banks take the foreclosed property to court, sheriff’s sale, and then buy it if no one bids on it. That is the difference between a foreclosed property and a REO (Real Estate Owned) property. I have a friend of mine who runs an REP (Real Estate Preservation) company and he told me the banks will do the absolute bare minimum to keep the place maintained. REP works something like this – trashout, rekey the locks, board up any broken windows, basic clean each week, cut the grass in the summer, put anti-freeze in the pipes, etc. Sometimes they will invest in repairs if they think the house will sell. From what I understand a lot of people leave when they get their first foreclosure notice. I have witnessed this first hand. I have helped my friend on trash outs before. I’ve seen places where people were so freaked out they left half their belongings behind only to calm down and come back to pick it up right before the trash out happened. My point is a lot of people leave way too early. They should stay in the home as long as possible. Sometimes banks walk away from the property leaving a vacant home that is still the homeowners responsibility. Both of you guys have good points. I agree with David on this one. Banks should renegotiate the terms of the mortgage or make other efforts to keep people in their homes. The banks lose bad on these foreclosed properties. So it’s not like they are recouping their loss by having to take on the home. Plus, banks will not rent the home out since they have the attitude that they are not landlords. A lot of people have lost their jobs and simply can’t keep up. Others, paid too much for the home and walk away because they are upside down in their mortgage. And hell yes, let’s take some TARP money and allocate it in grants to help keep foreclosures from happening. I… Read more »
Why? Extend and Pretend is the Banking Game. In actuality the banks are insolvent and if they foreclose and put the loss on the balance sheet that devalue the amount of “collateral” they have on the books and presto FDIC takeover. Bush, Bernanke, Obama and every banker knows it, but the public not so much, so you are expecting the government to fix something without actually acknowledging the problem. Which is a very similar problem discussed in the Race post on forensics. If you do not understand how we got here, then we cannot solve the problem. The boys on Wall Street and DC caused the problem by blowing housing prices up that could not be financed by working Americans as they were devaluing American workers paychecks and blowing up an unsustainable asset. Keeping people in unsustainable assets and locations is not a policy sustainable for the Wal Mart future.
@Greg – I wasn’t talking about benefiting the banks but the home owners. Bank insolvency is a totally different issue. I do follow the logic you are putting forth and agree with it to a marked degree. If you want to follow banks and out monetary system check out this link:
http://www.webofdebt.com/
Also, I am not for carte-blanch throwing money at everyone’s foreclosed home. The only way I think something like this would be feasible is to consider the conditions why the homeowner couldn’t keep up. Predatory lending – slap the banks into renegotiating and force them into the initial lending rate. Job loss – take some of the TARP money and apportion it via grants, if you qualify you get the dough. There has to be some tough love too – if your upside down in your mortgage and it was “fair” loan then tough. These are just quick and dirty ideas for discussion. I am against TARP and bailing out banks. But since no one is going to reverse it anytime soon let’s help taxpayers with taxpayer money.
It also brings up the issue I touched on earlier but never finished my thoughts. What do we do with these properties that are obviously heading towards blight? I explained a little of the process these properties traverse and some of them do sell. Unfortunately, some of them are abandoned by homeowner and bank alike leaving the city and neighborhoods to feel the pain.
Banks should do what is best for the banks. Let them determine their own fate on the default loans.
>>> Banks should renegotiate the terms of the mortgage or make other efforts to keep people in their homes. <<<
Check this out….
http://www.usnews.com/money/blogs/the-home-front/2009/4/3/high-redefault-rates-obamas-loan-modification-nightmare.html
In a nutshell, it says that modified home loans are experiencing a re-default rate of over 50%. That shows that for the most part, modifying a loan just delays the inevitable.