Buying a Bank Owned Property... frustration

[2manyrocks]

Herd mentality. CYA. Lots of banking regulations and internal policies. Too much internal second guessing. Little practical experience in business other than banking. Too much concentration in overall banking markets resulting in too little efficient management from far away for individual market decision making.

Should I go on?

 

[Pete Judd]

Reminds me of a guy 20 years ago, when every thing went to **** as a major project was canceled. A person I know, owned his land outright, and bought a double wide on time. He got laid off, stopped making payments on the double wide, they reppoed it, but could not move it for another 4 years. He charged the bank rent for it setting on his property after the repo, and lived in it as well. He figures it took over 6 years before the double wide with out payments before the bank sold it back to him for cash for scrap prices. As the bank figured out how much it would cost to move out of a "pit set". Mean while, the bank payed him rent every month.

 

[ultrarunner]

Reminds me of a guy 20 years ago, when every thing went to **** as a major project was canceled. A person I know, owned his land outright, and bought a double wide on time. He got laid off, stopped making payments on the double wide, they reppoed it, but could not move it for another 4 years. He charged the bank rent for it setting on his property after the repo, and lived in it as well. He figures it took over 6 years before the double wide with out payments before the bank sold it back to him for cash for scrap prices. As the bank figured out how much it would cost to move out of a "pit set". Mean while, the bank payed him rent every month.

Banks sure do defy logic at times...

We had a great local 23 branch savings and loan... never had an issue and the staff for the most part made careers there...

I once had a question about Saturday banking and I was transferred to the CEO and founder of the entire outfit... I was 18.

They got picked up by a large commercial bank and most of the staff was let go... they also closed the local branch and built new ones in the suburbs...

My bad experience with Wells was in Olympia WA... sometimes makes me wonder how they can keep the doors open from the mistakes I've seen...

 

[beppington]

My theory: Of course banks were bailed out once before. If they go ahead & sell an asset with a constantly varying & debatable valuation (house) at a loss, they now hold the cash - nothing to argue there, it is what it is, & when the transaction is done & they've lost money on it, that's it, done deal, book the loss. They'd also lose the lender-borrower relationship that we know includes sympathy to try to help the borrower/ homeowner by govt officials. However, if they continue to hold that mortgage with its varying & debatable value, they probably feel like if things got bad enough again they could just get bailed out again, plus they still stand to benefit from any sympathetic moves by the govt to help the homeowner monetarily.

Had we never bailed out the banks the first time, I think it's much less likely they would think like this now. They'd think, "Hey, we're on our own, so we better make the best deal we can now, take the loss & move on."

Could I be on to something?

Edit: I see schoolsout already posted the same basic theory, but better in far fewer words.

Oh, & more theory: it could also be that banks think (know?) that having a non-payer in the house is actually better for the house than having it empty. Less likely to be ransacked. The non-payer may actually do some up-keep. Temperature control will prob stay on. A leaky pipe would prob get fixed by them.

 

[riptides]

Could I be on to something?

Edit: I see schoolsout already posted the same basic theory, but better in far fewer words.

It is so simple, many have missed it.

The bank gets the original money, the asset, and more money from anyone trying to "recover" the asset. If they are thrifty, and sly, , they get more money bundling the asset on paper, and bundling the paper, , on more paper.

Bottom line, they have the asset, and most everyone else wants it.

 

[bdeboer]

Last foreclosure I purchased it took 12 months to close from the sheriffs auction to actually having a title. There were 9 releases due to the previous owner (a house flipper) getting a loan on the property without ever having a clean deed.

 

[clemsonfor]

my house i live in was a forclosure bought from the bank and it took less than 2 months i beleive since offer to close.

 

[ultrarunner]

my house i live in was a forclosure bought from the bank and it took less than 2 months i beleive since offer to close.

That has to be a record...

Is this 2 months from the date the Real Estate sign was planted in the front lawn/listed on the Multiple Listing Service?

Typically, I'm seeing about 4 to 6 months from the foreclosure till the time the home is marketed.

 

[beppington]

Another thing I wonder: If cash is devaluing/ depreciating due to inflation, govt printing more cash, etc. doesn't that mean houses might actually be holding their value better than cash? As in, even if a house is depreciating, maybe it's depreciating at a slower rate than cash ... ? So another reason a bank wouldn't want to sell a house outright (sever its ties to that house) ... ?

I'm not sure ... feel free to correct me :thumbsup:

 

[ultrarunner]

Another thing I wonder: If cash is devaluing/ depreciating due to inflation, govt printing more cash, etc. doesn't that mean houses might actually be holding their value better than cash? As in, even if a house is depreciating, maybe it's depreciating at a slower rate than cash ... ? So another reason a bank wouldn't want to sell a house outright (sever its ties to that house) ... ?

I'm not sure ... feel free to correct me :thumbsup:

The reason for me even considering buying the neighbors property is because it is adjacent to mine and I believe real inflation is coming and housing has been artificially kept low...

The cost of permits and utilities here are very expensive then add the lot plus materials and labor and many homes right now are selling for less than cost...

I believe home sales have increased Statewide for the last 9 months... people are buying.

In my county... prices remain relatively flat so far...