Why do banks make bad decisions you say?
IMO - greed. And may be an instant gratification?
We recently made an offer on a foreclosure. We went back and forth with counter offers a few times,
and then got stock on a difference of $1500, the bank would not budge.
This house needed extensive repairs, so we walked.
The house is currently on the online auction going for 25,000.
Just like you, we were willing to pay much more.
The economy would recover in no time if banks adjusted ALL mortgages to the current market value.
Any bank would be better off adjusting, let's say, a 150,000 mortgage to 80,000 and still collecting close to 200,000 (or is it 300,000?
) after 30 years, than selling this house as a foreclosure for 40,000.
People would stop losing homes. Cities, counties and states would get the tax revenues they so desperately need.
People will have extra money left for shopping and other activities that support many businesses.
Business will start hiring again. And so on and so forth.
You get the picture.
I am not an economist, but nearsightedness of financial institutions is evident to any person who can think logically.
Some banks, however, are starting to wake up and smell the coffee. I am curious to see how far this "reaching out" will get.
BofA reaches out to troubled homeowners - Real estate- msnbc.com