Big Lenders Bidding to Keep Homes
|November 7, 2013||Posted by Staff under Financial|
Banking giants from Wells Fargo to Fannie Mae are routinely paying top dollar on the auction steps to hold onto their own distressed properties, outbidding cash offers and paying well above assessed value.
This 2013 excerpt of the Herald-Tribune, Jly 6, is by Josh Salman.
Speculating that properties will appreciate even more in the next couple of years is a shift from the years after the nadir of the foreclosure crisis, when mortgage lenders accepted any fair offer to avoid the hassle of listing the default.
The competition between lenders and billion-dollar investment funds could drive housing values higher through the kind of price speculation that marked the walk-up to the Great Recession, beyond what most working families can afford.
The trend could suffocate short sale and loan modification approvals for delinquent borrowers.
Banks can control prices and inventory, and trickle these properties onto the market at their own pace.
Banks do not have to pay out-of-pocket until they bid more on an auction than what a court judgment deems they are owed on the foreclosure. That is a fairly rare phenomenon.