Troubled Assets - what to do with them?

[knewsom]

Ok, so the banks have repossessed shitloads of homes, and lose their shirts selling the properties at auction, because obviously they paid a lot more for them than the homes are now worth. Because of this, a lot of them are just sitting on the properties, leaving them vacant and un-maintained. This seems ridiculously foolish and short-sighted to me, not that this is really a surprise given the nature of how these banks operate - they focus on short-term gain only, not long term stability. The smart thing to do would be to work with property management companies to rent these houses out, maintain the properties, generate income, and jobs. Obviously banks are not in the "landlording" business, but when the economy is in a funk, those with the most flexibility tend to flourish.

Obviously we cannot just tell the banks what to do, but maybe we could give them some sort of temporary tax break on income generated from leasing property. Discuss.

 

[kennith]

Ok, so the banks have repossessed shitloads of homes, and lose their shirts selling the properties at auction, because obviously they paid a lot more for them than the homes are now worth. Because of this, a lot of them are just sitting on the properties, leaving them vacant and un-maintained. This seems ridiculously foolish and short-sighted to me, not that this is really a surprise given the nature of how these banks operate - they focus on short-term gain only, not long term stability. The smart thing to do would be to work with property management companies to rent these houses out, maintain the properties, generate income, and jobs. Obviously banks are not in the "landlording" business, but when the economy is in a funk, those with the most flexibility tend to flourish.

Obviously we cannot just tell the banks what to do, but maybe we could give them some sort of temporary tax break on income generated from leasing property. Discuss.

You going to sit around spouting off ideas, or are you going to delete your post and march your ass down to a local bank to start making money? You got what it takes to make a deal instead of waiting around for one to knock on your door?

Nah. Let's just sit around and bitch. Thanks for the heads up.

Cheers,

Kennith

 

[KyleT]

banks arent losing money.... we as taxpayers are....

 

[Drillbit]

Banks by and large aren't keeping the houses. They are selling them for what they think they can get and if they don't sell them they drop the prices pretty quick. I know this because I have 4 houses that i bought from banks. Trying to makes banks landlords is a terrible idea. That would give people like me less motivation to buy houses (less renters) and who would rent from a bank that's long term goal is to sell your house?

 

[kennith]

who would rent from a bank that's long term goal is to sell your house?

Idiots. The world is full of them.

Every day, some jackass loses his entire property investment because he wouldn't make his payments. Every day, some smart guy kicks him out, keeps the money, and finds another jackass.

Cheers,

Kennith

 

[Ballah06]

Invest in liquor heftily....it pays in next morning's dividends...

 

[p m]

Invest in liquor heftily....it pays in next morning's dividends...

word.

 

[d1driver]

2 years ago - house next to my dads was repossessed by bank. On the market for $400,000.
1 year ago - someone offered the bank $325,000 for the house and bank did not want to even talk about it
1 month ago - bank sells house at auction for $220,000 in need of repairs

 

[Ballah06]

2 years ago - house next to my dads was repossessed by bank. On the market for $400,000.
1 year ago - someone offered the bank $325,000 for the house and bank did not want to even talk about it
1 month ago - bank sells house at auction for $220,000 in need of repairs

Hindsight is 20/20. I am sure there are a few of us on here, whose property values have gone down after the housing market crash so to speak.

 

[d1driver]

Property values have dropped, but not 50% of original value. My point was the bank had a solid buyer but did not want to entertain any offers. Please keep in mind that this is a fairly big house, sitting on the saltwater in South Carolina with its own dock in the backyard on a 12 foot deep canal, in a gated community on an 18 hole golf course.

 

[Ballah06]

Property values have dropped, but not 50% of original value. My point was the bank had a solid buyer but did not want to entertain any offers. Please keep in mind that this is a fairly big house, sitting on the saltwater in South Carolina with its own dock in the backyard on a 12 foot deep canal, in a gated community on an 18 hole golf course.

Yeah, I hear you. Sounds like my house, minus SC location, dock, 12ft deep canal, gated community and a golf course. Haha. Not 50% value drop either, but still substantial. Does having redneck neighbors add to the property value?

 

[noee]

How 'bout we change the FASB accounting rule re: marking to market back to what it was before Obama and his thugs forced them to change it so that they don't have to market the loans to market? That'd be a good start.

The bottom line is, historically home prices have to come back to the line, which is about 3 times avg wages or so. Wages have been decreasing for many years now and that does not appear to be changing anytime soon. Unless wages stabilize or increase, avg home prices will have to continue down.

Knewsom, in case you're missing my point....Let the market decide. Centralized command and control gov't will never be able to work as effectively and efficiently as the market.

 

[95.D1.Rick]

How 'bout we change the FASB accounting rule re: marking to market back to what it was before Obama and his thugs forced them to change it so that they don't have to market the loans to market? That'd be a good start.

The bottom line is, historically home prices have to come back to the line, which is about 3 times avg wages or so. Wages have been decreasing for many years now and that does not appear to be changing anytime soon. Unless wages stabilize or increase, avg home prices will have to continue down.

Knewsom, in case you're missing my point....Let the market decide. Centralized command and control gov't will never be able to work as effectively and efficiently as the market.

This makes alot of sense. Let the market be. Its also not a good idea to make general statements about 'banks' policy. Some smaller banks are making good choices working with communities, and never were involved in any predatory lending to start with. The idea of tweaking a tax code to squeeze yet another break is IMHO, wrong-headed. F the tax code, lets fire 95% of the IRS and have a flat tax.

 

[Ed Cheung]

If I am the banker, I would sell the house asap to tied the amount to the month-end report rather than sitting my ass on the asset that will had a bigger risk of depreciating.

 

[MarkP]

Typically banks are not in the real estate business, they want to sell a house as soon as the can and they have no means to manage rental property.

Issues as to why banks are "sitting on houses":

- As noee pointed out mark to model prevents discovery of actual market value. The banks can carry these homes on their books at elevated, but false, value.

- Market to market would force immediate price discovery and bank insolvency. This insolvency would ripple all the way up to the fed who has bought billions at market to model prices.

- As reported some banks haven't even properly transferred the wet ink paperwork. They have improperly bundled and sold bonds and therefore cannot even legally sell the homes they effectively don't own, but carry on their books. In addition, how do you rent something you don't own?


The Obama administration and Fed are distorting the market, hence the extended period of time we will have "Troubled Assets"

 

[Mike_Rupp]

Knewsom, in case you're missing my point....Let the market decide. Centralized command and control gov't will never be able to work as effectively and efficiently as the market.

This absolutely simple concept is something that liberals can't handle. How can allowing the moronic masses decided how to run their own lives result in anything other than disaster?

They somehow just know in their heart that everyone, bankers included, have no fucking clue and need someone really smart to make decisions for them.

 

[ukoffroad]

Mike brings the knowledge. I have seen this happen to three homes that I know of, cash offer turned down only to sell it on the bank steps for even less.