The problem with many (if not most) of these foreclosed homes is that they were not worth what was owed on them when the foreclosures first took place, and many if not most of these houses have sat vacant since foreclosure, however long that has been, deteriorating and losing more value by the day.
Many, if not most of these homes have never had any kind of upgrade since they were built, and probably have substandard windows, doors, appliances, carpeting, appliances, etc; further detracting from the value. Even if you purchase that home at a deep discount, you won’t be able to market it without significant expense to bring it up to local code.
I recall early on in this “crisis” reading many reports of banks sending preservation teams into foreclosed homes to cut the water pipes and pump in anti-freeze, and other fairly extreme steps in an attempt to prevent further deterioration. At the very least, it will be expensive to restore those homes and reverse whatever damage the preservation methods inflicted.
The bottom line is that these properties aren’t going to be worth a great deal of money no matter who owns them, whether it is some “investment conglomerate” or the US Government. I believe the taxpayers took a bath on these properties years ago, when the original owners refinanced over and over again to wring every penny worth of value from their house to spend on trips to Disneyland, boats, breast implants, or lots and lots of drugs.
The money has been long gone and the taxpayer thoroughly screwed (without even a kiss...) no matter how deeply these homes are discounted or who buys them.
“The money has been long gone and the taxpayer thoroughly screwed (without even a kiss...) no matter how deeply these homes are discounted or who buys them.”
But wouldn’t this put a foot in the door for an incentive
to force foreclosures on mortgages deemed at risk of
failure?
“The bottom line is that these properties aren’t going to be worth a great deal of money no matter who owns them...”
Yep, you’re right about that.
To wit, my wife and I have been looking to purchase a 2nd home in So. Cal. for the past 6 months. From what we have seen, a majority of the homes on the market (foreclosed homes) are in absolute horrid condition and aren’t worth even half what the banks are asking for them.
We have decided NOT to purchase a 2nd home in So. Cal. and intend on looking elsewhere.