Banks own almost million properties, 107 months to clear - DFWstangs Forums
 
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post #1 of 7 (permalink) Old 11-02-2010, 09:39 AM Thread Starter
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Banks own almost million properties, 107 months to clear

http://blogs.wsj.com/economics/2010/...using-backlog/

Quote:
Banks’ vast pile of foreclosed homes doesn’t appear to be diminishing. That’s a troubling sign for the future of the housing market.

Back in April, this column tallied up all the foreclosed homes sitting in banks’ inventory, as well as the “shadow” inventory of homes in the foreclosure process or on which owners had missed at least two mortgage payments. At the time, we reported that at the current rate of sales, it would take 103 months to unload it all.

Over the past six months, that number has actually risen. Banks managed to pare down the shadow inventory, but largely by taking possession of foreclosed homes. As of September, they owned nearly 994,000 foreclosed homes, up 21% from a year earlier. The shadow inventory stood at 5.2 million homes, down 7% from a year earlier. Grand total: 107 months of inventory.

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post #2 of 7 (permalink) Old 11-02-2010, 02:12 PM
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I've recently tried to purchase two distressed homes in foreclosure... prepared to pay with cash.

Banks (for what ever reason) are not interested in selling off those propertys at anything less than full retail.

F 'em.

mardyn

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post #3 of 7 (permalink) Old 11-02-2010, 02:27 PM
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It at a point where they believe if they sell off too cheap it will hurt the value of the other 50+ home they own in that neighborhood.
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post #4 of 7 (permalink) Old 11-02-2010, 02:29 PM
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Originally Posted by mardyn View Post
I've recently tried to purchase two distressed homes in foreclosure... prepared to pay with cash.

Banks (for what ever reason) are not interested in selling off those propertys at anything less than full retail.

F 'em.

mardyn
I think what you'll find is that those "properties" show up as assets until the bank sells them for a loss. Makes the balance sheet look good...temporarily.

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post #5 of 7 (permalink) Old 11-02-2010, 03:45 PM Thread Starter
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Originally Posted by Vertnut View Post
I think what you'll find is that those "properties" show up as assets until the bank sells them for a loss. Makes the balance sheet look good...temporarily.
Bingo. Banks are inflating their balance sheets by not letting them sell below a certain value. This problem plagued the Japanese banking system for a decade. It kept their banking system from imploding.
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post #6 of 7 (permalink) Old 11-03-2010, 11:40 AM
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The local foreclosures are all over the place depending on the lending institution.

I've seen homes priced $10k+ over what a normal market would bring, and they let them sit on the market for a months without a price drop.

Then there is another company that starts out cheap, and drops the price every 3-4 weeks until it sells.

I've made an offer on one in the last month, and the seller wouldn't look at anything below full asking price. My offer was low, but it had hit the 90 day mark and they are asking 3 bedroom money for a 2.


The banks would rather sit on these and hope sales/prices return. They don't write the loss off until they sell. If rates were to go up they are going to be in a bind to move these.
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post #7 of 7 (permalink) Old 11-03-2010, 11:56 AM
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IT's all fun and games until the credit locks up again, then the banks need cash on their balance sheets, not a bunch of distressed homes that they then wouldn't be able to unload....ask WaMu how that works out

--wes
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