Quote:
Originally Posted by MarianneMD
Our Realtor told us that banks are actually in no hurry to sell their REOs, especially not at a bargain price. They prefer to let the occupants continue living there and prolong the foreclosure process because the market is still down in most areas. They are basically letting the foreclosed on former owners continue to squat because they are maintaining the property to a livable standard, therefore the bank doesn't have to. It saves them money while they hold the property then they can evict and sell when the prices go up. If this does not ring true, by all means let me know. There are some REOs in my city that are not sold and not on the market, The bank still owns them. I would love to try to get a great deal on one.
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Not only the reasons you listed but they also levy fines on the property owner so when the property value goes up that owner will get a nice surprise that he really owes a lot more than just the loan amount.. The bank will NOT allow the owner to make money on a sale. There is no benefit for the bank to foreclose. It keeps the property/value loss off their books and they do not need to pay taxes or maintenance. When/if property values go up you can bet they will serve foreclosure papers ASAP to get that property sold.
I get offers to sell my rental properties all the time. I don't even bother looking at them.