Sunday, May 30, 2010

Value of a foreclosed home

Please retweet this blogpost if you find it helpful in learning about government mortgage homeownership and bank loan modifications

There is great debate over values right now, and truthfully no one can really say what a home is worth with so many factors that affect cost being difficult to nail down. Here is an excerpt from an article from the government repo homes site on October 6,2009:

"The US is yet to recover from the economic crisis. People are faltering on loans after job loss – a phenomenon that has made foreclosures very common. Certain regions are riddled with foreclosures. Now the question that arises is what could be the value of a house in a region that has many foreclosed homes. In the eyes of a banker who is out to recover losses from bad mortgage, it may appear to be a valuable showpiece.
It may be pointed out here that Obama’s Making Homes Affordable program could not work out only because the lenders delayed loan modification. Most of the banks are so preoccupied with foreclosure filings and selling homes that they really do not have time for mortgage modification."

(In some ways, I suspect that the bank employees themselves who are responsible for doing loan modifications are just sloppy, lax and get paid either way. Who knows what imperatives they are handed from higher-ups. They're people. They see their own situation, rather than ours as home owners who have to figure out where to go and how to hang onto beloved pets we're committed to, if we lose this most basic necessity, the roof over our heads. They're insulated from the anguish, because to them we are numbers who represent profit and loss on paper, not human beings with needs.)

What a home could command in price three years ago, is irrelevant. Now we can't even use comps to get a per-sq-ft cost basis, because the recent sales are all over the map. A home down the street -a brick with three bedrooms, two baths and a fenced yard, - just sold at auction for less than $35,000. It was listed at $130,000 in 2008, when the owner lost his job and tried to sell.

Banks are cutting off their own noses to spite their faces on these foreclosures, because the government will buy them a new nose to replace it, so no worries if they lose billions.

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