Buying a Bank Owned Property... frustration

[clemsonfor]

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.

NONO sorry. I think it was listed with a RE company with a sign for something close to a year maybe? They dropped the price 20K at least from first listing. I just mean 2 months from my initial offer to me getting the keys.

 

[2manyrocks]

Given the increases in fuel costs and everything else that people buy, the only statistical reason I can think of for "no inflation" would have to be lowered housing costs. In practical terms, I suspect we already have inflation and it would be worse if the economy weren't doing so badly.

There's a difference in the way the regulators treat small banks versus big banks. A small bank can be liquidated or sold to another bank much more easily than trying to sell one of the large banks.

The way banks get bigger is to get rid of the higher salaried employees and consolidate back office operations into larger data centers. So when a small bank gets acquired, many times you'll see the more senior people either bail immediately or not stay that much longer as the buyer consolidates its grip on the purchase. As time goes on, management becomes more and more removed from the actual operation of the local branch. If they could figure out a way to just operate from a remotely controlled ATM, I'm sure they'd try it.

 

[rambler]

My question is where all the money came from to lend them? Our local rural newspaper has foreclosure ads every week from out of state lenders I've never heard of. It's not the local banks that have the bad loans for the most part. It's lenders I've never heard of.

I believe when Clinton was in office, and Republicans controlled congress, (so this is not ploitical, both paries were in on it) they determined everyone should own a house, and they passed stuff to make it so.

This was the beginning of the housing bubble.

They set up deals where lower downpayments were ok, and thy set up Freddie & Franny to bundle up loans in a big trading market, with the govt insuring part of 'qualified' loans.

This meant bigger loans at less risk to banks, and an easy way to package them together & wholesale 100's of loans all together to other banks.

So the bubble was on, there was more money, more intrest, and lower qualifications to get a loan....
Houses sold like gangbusters, demand for houses went up, new ones were built and all was wonderful, you could sell your 5 year old house for more thsn you paid for it, so houses were sold and resold and everyone made money every step ofthe way.

All because the govtr decided we were all owed the chance to own a house, no matter how poor our finances were, and besides, since houses are gaining in value, it's the best investment out there, yourhouse is worth more than you paid for it. Can even use that increasing value as colateral for a 2nd mortgage because houses are always worth more and more and more, no worries.

Freddie & Fanny made it low-risk to own a house mortgage, and made it good to own a whole bundle of all similar loans all one like the other - all your eggs i one basket. Properties or borrowers who didn't fit the 'govt ideal standard' couldn't be bundled up, so folks looking at bare property or make bigger downpayment were often left out of the loans - don't meet the 'every loan the same to give every non-homeowner a chance to get a home' model. So once the dominos fell, _every_ loan the banks held were all in free-fall, all failing the same, no spread out risk. The govt rules for these bulk loans required them all to be set up the same.

And that is how we got into the mess we are in now.

--->Paul

 

[ultrarunner]

^^^ the only thing I would add is that politicians often said home ownership is a right and that those not meeting underwriting requirements of the day were being passed over or excluded from this fundamental American Dream of home ownership...

At least this how it played out here...

 

[300UGUY]

Given the increases in fuel costs and everything else that people buy, the only statistical reason I can think of for "no inflation" would have to be lowered housing costs. In practical terms, I suspect we already have inflation and it would be worse if the economy weren't doing so badly.

There's a difference in the way the regulators treat small banks versus big banks. A small bank can be liquidated or sold to another bank much more easily than trying to sell one of the large banks.

The way banks get bigger is to get rid of the higher salaried employees and consolidate back office operations into larger data centers. So when a small bank gets acquired, many times you'll see the more senior people either bail immediately or not stay that much longer as the buyer consolidates its grip on the purchase. As time goes on, management becomes more and more removed from the actual operation of the local branch. If they could figure out a way to just operate from a remotely controlled ATM, I'm sure they'd try it.

I have a bil that worked for a very small bank - one office. It got ought out by a bigger bank, then that one got bought ot by another, and finally a 3rd. Then he lost his job. He went to work for another bank, worked about 1 year, yep, it got sold. Lost his job, hired into another bank, that job lasted about 6 months. Then to another bank, a company that trains banking folks, and a sales job in construction matierals. I think he had a couple more, but I forget where. Now he is works for a pawnshop. Likes it, hope's he can stay on there. Jobs are pretty shakey these days.