Latest -- Banks Still Run by Morons

[Mark N.A]

So I get a call from one of the brokers I use and he tells me about this ‘great duplex’ foreclosure that started out at $199k, then worked its way down to $149k whereupon an investor bid $85k. Which the bank refused point blank.

Fast forward a few months later and several price drops to $99k and the bank is screaming at this broker to find the investor who originally bid $85k. Well that investor’s gone but I’m around. So I take a look.

Well, during these long months on the market the roof starts leaking, the a/c above the ceiling overflows condensate, the ceilings start falling, the wallboard gets all wet, mold grows, vandals break windows, and fire ants invade the interior walls (this is slab-built). Did I mention the increase in drive-by shootings as this neighborhood suddenly worsened?

So I’m not bidding anything near what the bank thinks this wreck is worth, and no one else is, either. And brother, this property ain’t fixing itself up alone any time soon. Pretty soon it will be boarded up by the city and scheduled for demolition at the bank’s expense. Like a number of others I have watched.

Point being this is still TYPICAL BANK BEHAVIOR around here. And this particular bank has over 160 REOs here in NC, just one of several states where it does business.

Eventually the pendulum will swing the other way, probably too far over, I believe. But it will also probably bring along some wonderful bargains.

[Don Konipol]

Two things going on here. First the banks are trying to satisfy new and revised regulations being handed down on an almost daily basis by government bureaucrats. Secondly, banks with their huge overhead and high break even costs are trying to find an efficient way to dispose of low priced properties. Very frustrating for us investors to deal with. We are used to handing over our cash and getting title to property. This works great in a capitalistic system. In our new socialistic system, government sponsered institutions (such as banks) must now consider all social directives, i.e, how the sale of the property impacts the neighborhood, if all protected groups have a "fair" shot at purchasing the property, if some public housing group wants that property, etc. Welcome back to Roosevelt era liberalism.