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Doing this is very short-sighted and increases foreclosure rates. Long-term that creates more problems for cities. Many of our current problems are due to short-sighted short term gains at the sacrifice of long-term soundness. Because it isn't "illegal" does not mean it is ethical. That is why I posted it. If you can't see that, then you are part of the problem...
Remember, this is a TARP bank that is doing this.
You need to understand a few things here:
1. This is a practice that has been going on since the beginning of time. BOA and many others were doing this long before TARP existed.
2. If you want to talk about foreclosures you need to understand the process. In the event of a foreclosure the first lien holder gets all of their money before any other parties get a cent. That would usually be the mortgage holder holding the primary mortgage. After the first lien holder recovers all of their money the second lien holder gets paid and so on. The lien that was placed first before any other liens are recorded is automatically the first lien holder. You could have someone holding a 50K mortgage and if someone places a mechanic's lien on the property for 100K after the mortgage was recorded the mortgage holder is still in first position. That being said, it is rare that a lien holder who is in second or third position would initiate a foreclosure. They know that they are not likely to recover any money after the first position lien is paid off and they would bear all of the expenses and headaches of foreclosing on the property and auctioning it off. With the depressed market values these days the senior lien holder may hold a note that exceeds the current market value. If it were so easy to foreclose for delinquent property taxes cities and towns would be doing it and there would be no tax liens for sale.
3. Banks are not in the business of owning properties. The last thing that they ever want to do is foreclose. They come out losing money more often than not. They already have so many properties on their books these days that this is the worst possible time to acquire more. There is no way that they are initiating mass foreclosures by filing tax liens and foreclosing from a junior lien position.
4. Investors are in the business of making money. If you don't like this be sure to keep your property taxes current.
You all know what happens if someone doesn't redeem a tax lien don't you? Then the taxing authority forecloses on the house and sells it at another tax sale to the highest bidder. That doesn't happen that often but it can be the end result.
1. This is a practice that has been going on since the beginning of time. BOA and many others were doing this long before TARP existed... predatory lending deliberately creates an environment not conducive to paybacks.
2. If you want to talk about foreclosures you need to understand the process. In the event of a foreclosure the first lien holder gets all of their money before any other parties get a cent. That would usually be the mortgage holder holding the primary mortgage.... If it were so easy to foreclose for delinquent property taxes cities and towns would be doing it and there would be no tax liens for sale... any chance there could be a better way of going about things?
3. Banks are not in the business of owning properties. The last thing that they ever want to do is foreclose. They come out losing money more often than not. They already have so many properties on their books these days that this is the worst possible time to acquire more. There is no way that they are initiating mass foreclosures by filing tax liens and foreclosing from a junior lien position.... they artificially inflated housing with their lending practices, and when the market blows up in their faces, tying cinder blocks to our economy and millions of americans are counted as collateral damage, you really expect sympathy?
4. Investors are in the business of making money. If you don't like this be sure to keep your property taxes current. They're in the business of making money honestly, or in the business of getting one over on people? That's been the problem all along. Theft is legalized and you blindly defend it as something to aspire for in life. Americans (workers and consumers alike) are losing all confidence in business, that it isn't just an elaborate racketeering set up. Bernie Madoff has a dead son. Think about it.
This is not a class war. No one begrudges anyone earning an honest living.
It should be obvious to everyone at this point that an economy based on scams and games and grabbing pieces of money from every transaction is not functional, or sustainable. We have thrown away the primary engine of an economy--manufacturing--and tried to outsource the actual production while keeping in the loop of high finance. It lasted as long as it did because the USA was powerful. That power has been declining for quite a while now.
Soon the new countries that have encouraged sustainable economies--China, India, Germany--will realize the USA is just bleeding off of their productivity, and will build their own financial systems that will replace any function the US now has in the world. Then the real collapse will begin.
It should be obvious to everyone at this point that an economy based on scams and games and grabbing pieces of money from every transaction is not functional, or sustainable. We have thrown away the primary engine of an economy--manufacturing--and tried to outsource the actual production while keeping in the loop of high finance. It lasted as long as it did because the USA was powerful. That power has been declining for quite a while now.
Soon the new countries that have encouraged sustainable economies--China, India, Germany--will realize the USA is just bleeding off of their productivity, and will build their own financial systems that will replace any function the US now has in the world. Then the real collapse will begin.
I couldn't agree more. Far too many abstractions upon abstractions- the old razzle dazzle. When all the hype is said and done there'd better be something in the box or you just lost a customer. Quality & efficiency was our asset and it's been cheapened down to volume junk.
Private industry--- I think it's time CEO's be challenged by shareholders to earn their keep not just for the sake of making themselves look good at the company's expense. Short term investors gaming the system aren't the money supply that keeps business running smoothly anyhow. Corporate charters should have long term fiscal health foremost, short term goals that align with CEO careers are a disaster. 401k managers can't live without them, and genuine commerce can't live without 401k managers- the backbone of privatized investing. The monkies in the middle (the board rooms) have golden parachutes and enough is enough. Lucy in the Sky with Diamonds management has wore out it's welcome.
Same should apply to government. What's the mission statement? They're not here to kiss the Pope's ring. Indulging finance industry was clearly not in the best interests of the American people. I don't believe willfully neglecting trade imbalances for decades was either.
The maximum rate of return on a tax lien can be far higher than other investments. For example, Florida offers a maximum rate of 18% (1.5% per month), while Arizona offers a maximum rate of 16%. Iowa offers a guaranteed 2% per month (or 24% annual return). According to NRS, Nevada is 1% per month - 12% annually.
* However, as an incentive to encourage bidding, Florida law guarantees a 5% minimum return regardless of the rate bid (except if the bid is zero percent) or when the lien is redeemed. Thus, if a Florida certificate is purchased at auction on one day and redeemed on the next, the investor will earn 5% over the certificate price for one day's holding, or a mind-boggling 1,825% annualized return!
Florida privatizes the profits, socializes the risk on a never ending merry go round of house flippers?
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