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This is a very interesting case, as it sets precedent that a bank sitting on a property without trying to sell it, abandons its interest in that property.
This may be an important development in facilitating the much needed bottoming of the housing market.
If banks are left with the option of selling properties and taking some loss or loosing them in court cases and taking a total loss, it may prompt them to begin to unload their massive shadow inventories.
This case will apply not only to associations, but anyone else having liens against foreclosed properties including local governments, etc.
so the owner of the unit was never foreclosed on, and wasn't making his/her HOA payments also? why would that result in sueing the bank? wouldn't they sue the owner for payments? this is odd to me.
This is a very interesting case, as it sets precedent that a bank sitting on a property without trying to sell it, abandons its interest in that property.
The cost of forclosing is tending to swing negative as it costs money to sell a house. So for the banks to walk away is less costly than to try and recover money.
Quote:
Originally Posted by jimhcom
This may be an important development in facilitating the much needed bottoming of the housing market.
If you want the market to bottom you need more buyers than houses. Full employment and higher wages. Without those we won’t see a bottom in the market for a very long time. Japan has been twenty years in their popping real estate bubble without seeing the bottom. True inflation is faster and less costly in the long term than what we are headed for.
Quote:
Originally Posted by jimhcom
If banks are left with the option of selling properties and taking some loss or loosing them in court cases and taking a total loss, it may prompt them to begin to unload their massive shadow inventories.
Net recovery in some cases has swung negative, cheaper to walk away. In some cases you have no recovery of equity, none.
Quote:
Originally Posted by jimhcom
This case will apply not only to associations, but anyone else having liens against foreclosed properties including local governments, etc.
We need house prices going up not down in the worst possible way but we don’t need another bubble as well. Inflation.
we need prices going where they will based on actual market forces at play in each of the various regional markets and NOT having that reality further delayed by even more manipulation by the same vested interests that are (most) responsible for the mess in the first place.
It makes sense to me. In this case the owner stopped making payments to the HOA. The bank did not exercise it's right to foreclose when the owner ceased making mortgage payments. The HOA has a right to collect the HOA payments from the owner by foreclosing on the condo, but the bank has a superior right to foreclose and take it away from the HOA and then the HOA would be stuck. Instead they sue the bank to force the bank to take possession and then the HOA has a claim against the bank for back HOA payments since the bank becomes the new ower and bound by the deed covenants.
The court did set a new precedent by establishing a limit on the time a mortgagor can delay exercising collection activities without forfeiting legal rights.
It may have the negative effect of increasing foreclosures, which the current administration is proud of saying are down, and further depressing some markets. The good news is that it is vital for the housing correction to balance out for the long run. Once the glut of unpaid mortgages are gone, the housing market will have to establish a going rate based on a true supply and demand instead of this artificial level we are still dealing with.
so the owner of the unit was never foreclosed on, and wasn't making his/her HOA payments also? why would that result in sueing the bank? wouldn't they sue the owner for payments? this is odd to me.
If the bank forecloses, and sells, then someone else will move into the condo and start paying the HOA dues. If the bank does nothing, the dues remain unpaid.
we need prices going where they will based on actual market forces at play in each of the various regional markets and NOT having that reality further delayed by even more manipulation by the same vested interests that are (most) responsible for the mess in the first place.
I want to have higher wages on the bottom end and full employment. That is how I want to get the prices of houses going up. A 4X on the minimum wage. We need to correct the ratio between average household income and average house price. Inflation is fast. deflation is slow and painful. Inflation is also painful but... all we need is about a 200% increase in GDP by inflation pushed by increasing the bottom of the wage distribution. Japan is two decades into their popping real estate bubble and they haven't hit bottom yet. Do you really want to try that one here?
It may have the negative effect of increasing foreclosures, which the current administration is proud of saying are down, and further depressing some markets.
The negative is only in the eyes of the beholder. Foreclose on all delinquent houses and force a bottom to the market. Bloody mess it would be. Not to mention the havoc it would wreck in the banking system. I'm all for having enough inflation to get the prices going up.
I want to have higher wages on the bottom end and full employment. That is how I want to get the prices of houses going up. A 4X on the minimum wage. We need to correct the ratio between average household income and average house price. Inflation is fast. deflation is slow and painful. Inflation is also painful but... all we need is about a 200% increase in GDP by inflation pushed by increasing the bottom of the wage distribution. Japan is two decades into their popping real estate bubble and they haven't hit bottom yet. Do you really want to try that one here?
Your pipe dream of having a $30hr minimum wage job is simply not going to happen, so you would do yourself a favor by not continuing to repeat it in every post you make.
Inflation is not an easy way out, and if you truly understood economics, you would know that.
In economics like every other mathematical equation, for every action there is a reaction. The action in this case was a massive bubble of debt and unearned consumption.
The reaction is a period of deflation to balance the books.
Another period of inflation only increases the bill to be paid latter.
We are already dangerously close to being incapable of paying that bill now.
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Not to mention the havoc it would wreck in the banking system. I'm all for having enough inflation to get the prices going up.
