Banks are in so much trouble.

our neighbors house got forclosed on back in october i believe while i was at school, well my mom had been looking atleast once a week trying to find it listed, and we never saw anyone come and look at the house, well yesterday there was an unusual amount of people looking at it. probly 20 atleast before i went to class, and my mom said there was about 5 or 6 while i was at school, come to find out its listed 200k below market value so all our house values on are street are going to the crapper real soon. only chance for my parents to come out even is if my dad gets transferred again because his company will buy the house for what he paid for it.

so if banks are holding houses for a few months, and selling them for hundreds of thousands less than there worth this would explain why they have no money. so basically people are already in trouble with money, banks need money, so gov't gives them money from the people who in the first place have no money, but the money they do have are in the bank so i don't think banks deserve any money from the gov't to help them out if there all this idiotic with the properties they have forclosed on. and a guy that lives at the end of the street offered 145k more than its being listed for now 2 months ago and they rejected his offer. but i think the realtor who listed it is trying to sell it to somebody they know. my mom is calling some people to day and hoping to get the realtor fired for listing it at the value its listed at and she scared off a few people yesterday when she went and started arguing with the realtor in front of clients.

so has anyone else who deals with housing markets or banks realized whats going on? the realtor in alabama before we sold are house tried to sell our house for 70k below because they already had a buyer before it was listed. and this is my very uneducated view/opinion on this so this is just my personal experience.

 

i dont know whats really going on either! there is a house down my street too thats under half of what i bought my house 4 years ago..wtf!

 

i forget what its called but you can get out of a loan for what you owe on it by getting the bank to agree to take a loss on the house. you also have to have a buyer already.

its a hit on the credit but not as bad as a total foreclosure. helps people out who cant afford the house anymore.

also, around here, they are starting to make whoever owns the house (bank, company, person, whoever) maintain it so holding onto a house sometimes just isnt worth it if no one is living in it.

what im saying is your neighboring house may not have been a foreclosure and if it was the bank is just trying to break even on it.

 

no it was forclosed, they had their cars repo'd right before i left for college, and their son kept me kinda up to date on the house. but it was forclosed on and has just been sitting. and theirs obviously not a buyer if tons of people are looking at it.

heres another bit of info. my moms friend wanted to look at it last night, she called the realtor who listed the house he would not show it without a 24 hr in advance appt. so she had to get another realtor to show her the house, so obviously he knows who he wants to buy it

 

After a house is foreclosed on a Realtor is only acting on the Bank's behalf to recover a certain amount. The bank wants it sold quickly as banks do not want to be landlords or have to maintain property and pay taxes. They only need to cover their costs.
Foreclosures are almost always sold at less than market value to accomplish this.

 

well if thats the case i would have expected for someone to move in october or november. now the house looks like crap with weeds everywhere and the plants overgrown or dead. and sure its a forclosure but they could have listed it for 100k more and still sold it quick as hell, right now its over 300k cheaper than it was when the old neighbors bought it. so now our house prices will be effected even tho the realtor next door promises it wont.

 

Banks are in trouble because dumbarse customers got into houses they had no business being in. Then they stop paying their mortgage for whatever reason and the banks are left with a ton of property to move.

There are always two sides to every problem. The banks were idiots for creating these outrageous financing options and the customers who purchased them are even dumber.

"Hey I got a $500,000 mini mansion for only $800/mo!!!! I work at WalMart's! I love this country!!".

Idiots...

 

thats very true. but if the banks weren't stupid enough to loan money out to anybody with an arm and a leg, these idiots couldn't get stuff they shouldn't. i know people are to blame as well but it kills the housing market for people.

 

Stupidity is no defense for a homeowner. If you are too dumb to read a contract you are signing then you shouldn't be buying a home. Don't blame other people for someone's own stupidity.

 

Right before the crap hit the fan there was a bank that was giving out mortgages to people that were in the country for only 2 years. 10 years ago you needed 50 pages full of info and a stool sample to apply for a house and last year you approved over the phone. And $500k mini mansion

 

The banks are thieves and the people are idiots but bitching about it won't solve anything. Buy the damn house for $300K less than you think it's worth and rent it out while you sit on it for a few years until property values come back up then sell and make some money. Property values go down when people don't want to buy places. Buy it, make it nice, maintain mom and dads property value and make some money when it's time to sell.

 

Correct, that is called a short sale.

Foreclosures take several weeks to several months to process before the lending institution takes possession. At that time, the lender is willing to take almost anything to dump that property. Trust me, banks and lending institutions DO NOT want to be in the real estate business. The realtor probably had a bunch of people there in a short period because he/she was contacted by the lender prior to the lender taking possession, and had some lead time to market the property before the property was available for sale. The most likely scenario is that the people viewing the house were bidding on it in an auction. It is happening more and more. I know this firsthand, as I am a Real Estate Appraiser.

My brother in California has a $750,000 (purchase price) house that he would be lucky to sell for $300,000. He still owes over $600,000 on it.

 

ARM mortgages have lead many banks to failure to. Thats Adjustable rate mortgage, first 3 years your payment is cool, and low. Then 6-9 years its 1000+ when it used to be 450.

 

Like I said... two sides to the story. Banks were dumb, people are even dumber...

 

These loans were for people who bought house and flipped them with in 2 years. I know 2 people who got these loan and it worked out very well for them.