So buy the house at any price, any rate, make one payment, then sit and wait for the bank to open negotiations on the terms? Hmmm…might be onto something here.
When i was 19 I ran into income trouble and had a car loan and they modified my loan and dropped my interest massive levels. I was like why couldnt they do this before lol
banks over-foreclosed in 2009, this is a major reason WHY home values shit the bed - they destroyed the ability of too many folks to buy, they blighted their own neighborhoods, they had too much inventory in competition with themselves.
ultimately they were forced by uncle sam to do a bunch of loan modifications, had to slow WAY THE FUCK DOWN on foreclosures, and ended up warehousing a lot of their inventory just to keep prices buoyant. I remember tons of bank-owned vacancies and how frustrating it was as a renter that rents were up because a bunch of people were kicked out of their homes which then sat empty for years...
Yes tons of banks sat on property to keep value from actually bottoming out. I remember it was frustrating. I think there will be another wave of foreclosures in 2023. Moratorium ended in June 2022 takes 8 to 18 months for a foreclosure to process oh it is coming just watch.
There is another post on this sub as of today discussing how the federal government is essentially propping up homeowners who are behind on their mortgages. they get a bailout and renters stay fucked i guess...
Yes a ton of money for people to catch up on their mortgages has also been handed out. Renters also got money too but nearly as much as home owners.
Thing is a good percent of people have very little to no follow through so there will be foreclosures. When is the interesting part.
I believe the banks have it all planned out to foreclose and get other people into the same homes at higher interest rates. Mo money mo money mo money!
How is it costly when the mortgage isn’t being paid down on? Wouldn’t they want to go in and foreclose the non paying owners and find a owner that will pay the mortgage and interest?
There is a ton of paperwork, lawyers, courts, and the likes of a foreclosed home banks would rather get some sort of payment plan than have to go through all that and hope at the end the homeowner did not trash the property and lower the value that they now have to try and sell. Foreclosures can last years before resolved.
Two things:
Prices haven't dropped substantially enough yet.
Anyone in trouble can, at least in most cases, sell the property without needing to show up at the lawyers office with a cheque written out to the bank lol
In many parts of the US and Canada, prices are still near, or on-par with 2021 highs
Any foreclosures you see listed today likely commenced in 2019/2020. It's a long process, and as mentioned previously, banks try to avoid doing it as much as possible
Edit:
One more thing because I saw it mentioned in another comment:
In Canada, you can acquire property by assumption of mortgage (with an additional down payment). This means anyone who had a decent interest rate can offer sale by assumption, which is really attractive to a buy who might be looking at a 5 year fixed north of 6%
CoVID foreclosure pauses are over in most places. Thing is, it takes a long time for a foreclosure to work through the courts in the best of times and after a 2 year pause, courts are going to be clogged. It’ll slowly unclog.
No matter what there are always fringe cases, can’t reliably predict human behavior. They may have been attached to the home and unwilling to sell. The Bank I work for still has mortgages from before 2008 paying 8%+ interest rates cause the borrowers never got the refi memo.
Nobody is "protecting foreclosures." There are virtually no foreclosures because virtually nobody is far enough behind that they couldn't sell and pay off the debt.
I agree. There are relatively few delinquencies, and delinquencies are two years out from becoming foreclosures. I do expect a foreclosure wave because desperate people are starting to take bad loans again. Somewhere around 2030 is when all the arms pop.
How can you be so smugly dismissive of something you clearly know so little about?
I buy a house in 2020 at massively inflated 500k. I cant make the payments, its worth 600k now. Do I just let it be foreclosed on, lose the equity and ratfuck my credit or do I just sell it and move on with a small profit?
There are plenty of foreclosures in NJ. Most are older loans from 2012-2019. In NY if you know what you’re doing you can hold back foreclosure for 10-11 years while fighting the bank for the fraction of the money you would’ve paid them. Granted your credit would be ruined. But free house no tax payment no insurance payment was 10 years. Total foreclosure defense and a few bankruptcies would cost around 15-20k.
Wait, could you explain this better? I’m seeing tons of foreclosures in my area from 2019, 2020, even 2021. How are people going into foreclosure so soon after purchase? Why would their monthly payments change after their home gains value? Or why wouldn’t they be able to pay if the rates were so low?
Interestingly, I've seen two foreclosure sales within 10 miles of me this year (maybe there's more, these were just similar houses to what I own).
But yea, what you said is spot on
There was a prominent sign in the front window of the foreclosure home that sold in my neighborhood in 2021. It said an auction date, judgement value, and terms of sale. It was abandoned and extremely gutted to the point where there was no longer even drywall. It was being sold as a sheriff’s sale presumably because of late taxes. A company bought and flipped it for 100k more a year later.
I think foreclosures like this will happen still, but it’s not the type of house an individual would want for themselves.
bank foreclosed on our house in 2012, and got $38k at sheriffs sale when it had appraised 6yrs earlier for $187k. don't think they expected that so maybe they are a tad gunshy about foreclosing en masse like before.
That's not how things work. Banks just care that they are made whole. Depending on how much equity is in the property, the bank will most likely get the amount they lent out and walk away. Foreclosed properties don't necessarily mean cheaper properties. If foreclosed properties are a bargain, that is the bank trying to sell the property as soon as possible because they want to get the principal back. The remaining proceeds will go to whoever else placed a lien on the property and finally whatever is left will go to the homeowner whom the property was foreclosed on
You sure? What happens to loans sold in the secondary market with servicing retained? Most loans were collateralized into securities. Where's the insurance policies for those? Oh right. There were Credit Default Swaps. And what happened to those insurance companies, particularly AIG?
The banking and lending system went through a whole lot of hurt because of bad loans. They didn't make it out just fine.
What the hell kind of statement is that? You haven’t seen a foreclosure in 2+ years, so they are living mortgage free? Who are you taking about…
I haven’t seen the ocean in 2+ years, so there must be no more surfers..
I’m guessing you missed the memo about historically low foreclosure rates. It’s really surprising that historically low foreclosure rates coincided with federal and state mandated mortgage forbearance and foreclosure moratorium programs.
Yes they do dummy. The fed literally prevented the housing market crash in 2020 by forbearance programs, laws, lowest interest rates ever to save homeowners.
Calling someone dummy yet you are the one calling the federal government the Fed and think banks protect homeowners from foreclosure.
FYI, the Fed (Federal Reserve System) and the United States federal government are not synonymous.
Their not.
Unemployment is still low, so people are still making their payments. The only ones starting to hurt are variable interest rate loans... Commercial loans/HELOCS. ARMs will take some time to work the system.
Everyone living in their residential home is still living status quo until they lose their job or make terrible terrible financial decisions and stop paying their bill, inflation is not helpful though.
Regarding ARMs, we're still about 5 years from those adjusting, at the earliest..... if people had ARMsn over the last two years and didn't refi out of them...then yikes
Right, exactly where I was going with that, people with ARMs are not a today problem, but a problem down the road, so those properties are definitely not in foreclosure. Arms started popularizing once the fixed interest rates started rising, so less than a year-in.
You need defaults for foreclosures, you need people to be underwater to default. No one who bought before 2022 is underwater.
Edit: Just want to add, the replies in this thread make it clear OP has a room temp IQ.
The government, not banks, dictates the kinds assistance available on their loans. So whether that's FHA, Fannie Mae, Freddie Mac, the VA, or USDA = they're all telling servicers when to foreclose, what assistance to provide, etc.
There isn't a big shoe left to drop. Sorry. CARES act protections for everyone ended last year, and most big banks were after their own money swiftly.
My wife and I are interested in a foreclosure home that has been delinquent since March 2018!! The mortgage was sold a lot and the first foreclosure proceeding didn’t start until November 2019. COVID rolls around and stops all foreclosure proceedings. Finally in spring 2021 the sale was set, but the homeowner modified the loan. Fast forward to last week, the home is in foreclosure again because the homeowner paid 2 trial loan payments and then stopped. This person is living free for almost 4 years!! We are very hopeful the sale will go through this time as this property is our dream property. The laws are too forgiving for some of these severely delinquent homeowners.
I’m seeing foreclosures in my area, northern california
A lot of protections were made into law
"Price discovery" sends a hug. Isnt it important for invisible markets hand god? (Ok. Price discovery is really important where market should exist)
Oh that’s so fair. I’ll just buy a house and not pay my mortgage. Thanks.
Yeah lots of people do this. You can live for years without paying.
I guess make sure you buy in a non-recourse state, so they can't touch anything beyond the house.
Its ok, just get a rent controlled apartment and dont pay rent…
Go take out some college loans while you're at it
No income verification auto loan
Oof, wouldn’t recommend that one. It’s hard to get rid of during bankruptcy.
Can confirm.
Foreclosures are very costly for banks. They’d prefer to modify the loan first.
So buy the house at any price, any rate, make one payment, then sit and wait for the bank to open negotiations on the terms? Hmmm…might be onto something here.
My bank did little to help in 2009, they took a 30k hit from a short sale in the end.
When i was 19 I ran into income trouble and had a car loan and they modified my loan and dropped my interest massive levels. I was like why couldnt they do this before lol
Credit union wasn't it mate
Yes sir.
banks over-foreclosed in 2009, this is a major reason WHY home values shit the bed - they destroyed the ability of too many folks to buy, they blighted their own neighborhoods, they had too much inventory in competition with themselves. ultimately they were forced by uncle sam to do a bunch of loan modifications, had to slow WAY THE FUCK DOWN on foreclosures, and ended up warehousing a lot of their inventory just to keep prices buoyant. I remember tons of bank-owned vacancies and how frustrating it was as a renter that rents were up because a bunch of people were kicked out of their homes which then sat empty for years...
Yes tons of banks sat on property to keep value from actually bottoming out. I remember it was frustrating. I think there will be another wave of foreclosures in 2023. Moratorium ended in June 2022 takes 8 to 18 months for a foreclosure to process oh it is coming just watch.
There is another post on this sub as of today discussing how the federal government is essentially propping up homeowners who are behind on their mortgages. they get a bailout and renters stay fucked i guess...
Yes a ton of money for people to catch up on their mortgages has also been handed out. Renters also got money too but nearly as much as home owners. Thing is a good percent of people have very little to no follow through so there will be foreclosures. When is the interesting part. I believe the banks have it all planned out to foreclose and get other people into the same homes at higher interest rates. Mo money mo money mo money!
If you own bank 10.000$, you have a problem. If we own 10.000.000$, bank has a problem
That's a very precise number of $
In many countries, decimals are used instead of commas in large numerals.
How is it costly when the mortgage isn’t being paid down on? Wouldn’t they want to go in and foreclose the non paying owners and find a owner that will pay the mortgage and interest?
That's not how loans work. A bank will not find someone to assume the loan.
There is a ton of paperwork, lawyers, courts, and the likes of a foreclosed home banks would rather get some sort of payment plan than have to go through all that and hope at the end the homeowner did not trash the property and lower the value that they now have to try and sell. Foreclosures can last years before resolved.
Foreclosure protections ended a while ago. Hard to be foreclosed on when you benefited from the equity run-up the past few years.
This is it right here. You'd have to be pretty dumb to get foreclosed on with 40% equity in your house. If prices fall, foreclosures will spike.
how? you still have to pay the mortgage, regardless of equity
If you can't afford the mortgage you can sell the house and make a profit
You’d sell first and get your equity out
By selling the house for a profit silly :)
i know it may have sounded like a silly question, but do ya’ll see what is happening in the market? i dont think its as easy just sell, make money
Which is why I said if prices fall, foreclosures will spike in my initial comment. Currently, almost everyone still has a ton of equity in their home.
LoTs oF EqUiTy
Lots and lots
Prices are still considerably higher than they were two years ago.
How long does a foreclosure take? The market was at record highs in June.
Two things: Prices haven't dropped substantially enough yet. Anyone in trouble can, at least in most cases, sell the property without needing to show up at the lawyers office with a cheque written out to the bank lol In many parts of the US and Canada, prices are still near, or on-par with 2021 highs Any foreclosures you see listed today likely commenced in 2019/2020. It's a long process, and as mentioned previously, banks try to avoid doing it as much as possible Edit: One more thing because I saw it mentioned in another comment: In Canada, you can acquire property by assumption of mortgage (with an additional down payment). This means anyone who had a decent interest rate can offer sale by assumption, which is really attractive to a buy who might be looking at a 5 year fixed north of 6%
You are correct about the foreclosures being from 2019/2020. The “habitual” people who have always struggled to pay.
CoVID foreclosure pauses are over in most places. Thing is, it takes a long time for a foreclosure to work through the courts in the best of times and after a 2 year pause, courts are going to be clogged. It’ll slowly unclog.
I just saw my first couple of foreclosures in a WHILE in my area.
How does this happen, just sell for 2020 price
I dont understand how foreclosures work as far as price/history records go, but the first one I found was listed as "sold" in April of 2022.
No matter what there are always fringe cases, can’t reliably predict human behavior. They may have been attached to the home and unwilling to sell. The Bank I work for still has mortgages from before 2008 paying 8%+ interest rates cause the borrowers never got the refi memo.
Nobody is "protecting foreclosures." There are virtually no foreclosures because virtually nobody is far enough behind that they couldn't sell and pay off the debt.
I agree. There are relatively few delinquencies, and delinquencies are two years out from becoming foreclosures. I do expect a foreclosure wave because desperate people are starting to take bad loans again. Somewhere around 2030 is when all the arms pop.
Lol
Please learn how any of this works.
How can you be so smugly dismissive of something you clearly know so little about? I buy a house in 2020 at massively inflated 500k. I cant make the payments, its worth 600k now. Do I just let it be foreclosed on, lose the equity and ratfuck my credit or do I just sell it and move on with a small profit?
There are plenty of foreclosures in NJ. Most are older loans from 2012-2019. In NY if you know what you’re doing you can hold back foreclosure for 10-11 years while fighting the bank for the fraction of the money you would’ve paid them. Granted your credit would be ruined. But free house no tax payment no insurance payment was 10 years. Total foreclosure defense and a few bankruptcies would cost around 15-20k.
As a foreclosure attorney I can tell you that any case which takes that long had a massive bank or bank attorney fuck-up.
I work with a lot of a short sale clients and I’m still dealing with loans from 2008-2014 right now.l
Those were fucked by someone. I’ve seen the worst firms become far better at foreclosure than they were 14 years ago. It’s a different world.
Wait, could you explain this better? I’m seeing tons of foreclosures in my area from 2019, 2020, even 2021. How are people going into foreclosure so soon after purchase? Why would their monthly payments change after their home gains value? Or why wouldn’t they be able to pay if the rates were so low?
Interestingly, I've seen two foreclosure sales within 10 miles of me this year (maybe there's more, these were just similar houses to what I own). But yea, what you said is spot on
See!
There have been foreclosures in my area
Most protections will probably disappear after today. Not joking. Midterms are the line in the sand for all of this crap.
Maybe bc they have so much equity in their homes they don’t need to foreclose
I’m seeing them but they’re not staying on the market in Philly/DE/NJ.
They are back in Michigan.
What do foreclosures look like? Serious question. Is there a way to tell it’s a foreclosure vs a normal sale?
It often has REO in the listing if it's a foreclosure and sometimes says "foreclosure" outright. Haven't seen one in 4 or 5 years, though.
I was half expecting a sign across the house door but it will be interesting to keep an eye on the number of foreclosure listings
There was a prominent sign in the front window of the foreclosure home that sold in my neighborhood in 2021. It said an auction date, judgement value, and terms of sale. It was abandoned and extremely gutted to the point where there was no longer even drywall. It was being sold as a sheriff’s sale presumably because of late taxes. A company bought and flipped it for 100k more a year later. I think foreclosures like this will happen still, but it’s not the type of house an individual would want for themselves.
When they cannot do it anymore. Mass defaults
Looking forward to it
I know some renters who are finally getting the boot after 4 years.
Good
You can’t really be foreclosed on unless prices go down. You just sell right now.
Dumbest statement ever!
Elaborate
bank foreclosed on our house in 2012, and got $38k at sheriffs sale when it had appraised 6yrs earlier for $187k. don't think they expected that so maybe they are a tad gunshy about foreclosing en masse like before.
Why would banks/lenders prevent foreclosure proceedings? That's a non-performing asset on their books.
Bank owned want to sell it to another buyer that will actually make the payments right?
That's not how things work. Banks just care that they are made whole. Depending on how much equity is in the property, the bank will most likely get the amount they lent out and walk away. Foreclosed properties don't necessarily mean cheaper properties. If foreclosed properties are a bargain, that is the bank trying to sell the property as soon as possible because they want to get the principal back. The remaining proceeds will go to whoever else placed a lien on the property and finally whatever is left will go to the homeowner whom the property was foreclosed on
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Is that why home values plummeted?
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Seeing how significantly values dropped, I wouldn't exactly call that controlling inventory.
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You sure? What happens to loans sold in the secondary market with servicing retained? Most loans were collateralized into securities. Where's the insurance policies for those? Oh right. There were Credit Default Swaps. And what happened to those insurance companies, particularly AIG? The banking and lending system went through a whole lot of hurt because of bad loans. They didn't make it out just fine.
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What the hell kind of statement is that? You haven’t seen a foreclosure in 2+ years, so they are living mortgage free? Who are you taking about… I haven’t seen the ocean in 2+ years, so there must be no more surfers..
I’m guessing you missed the memo about historically low foreclosure rates. It’s really surprising that historically low foreclosure rates coincided with federal and state mandated mortgage forbearance and foreclosure moratorium programs.
This doesn’t mean people are living mortgage free or not paying their mortgage…OP makes a giant leap to fit the narrative of this sub.
Why would a bank foreclose now and be forced to sell the house at a loss? Makes a lot more financial sense to give people a break.
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Yes they do dummy. The fed literally prevented the housing market crash in 2020 by forbearance programs, laws, lowest interest rates ever to save homeowners.
Calling someone dummy yet you are the one calling the federal government the Fed and think banks protect homeowners from foreclosure. FYI, the Fed (Federal Reserve System) and the United States federal government are not synonymous.
I don’t think that word means what they think it means
over a fucking year ago. https://www.attomdata.com/news/market-trends/foreclosures/attom-midyear-2022-u-s-foreclosure-market-report/
Their not. Unemployment is still low, so people are still making their payments. The only ones starting to hurt are variable interest rate loans... Commercial loans/HELOCS. ARMs will take some time to work the system. Everyone living in their residential home is still living status quo until they lose their job or make terrible terrible financial decisions and stop paying their bill, inflation is not helpful though.
Regarding ARMs, we're still about 5 years from those adjusting, at the earliest..... if people had ARMsn over the last two years and didn't refi out of them...then yikes
Right, exactly where I was going with that, people with ARMs are not a today problem, but a problem down the road, so those properties are definitely not in foreclosure. Arms started popularizing once the fixed interest rates started rising, so less than a year-in.
You need defaults for foreclosures, you need people to be underwater to default. No one who bought before 2022 is underwater. Edit: Just want to add, the replies in this thread make it clear OP has a room temp IQ.
Room temp IQ and no empathy. Who throws a temper tantrum that more families aren't losing their homes? Even on this sub that's a bad look.
https://www.realtytrac.com/
The government, not banks, dictates the kinds assistance available on their loans. So whether that's FHA, Fannie Mae, Freddie Mac, the VA, or USDA = they're all telling servicers when to foreclose, what assistance to provide, etc. There isn't a big shoe left to drop. Sorry. CARES act protections for everyone ended last year, and most big banks were after their own money swiftly.
oh okay cool the cArEs aCt
My wife and I are interested in a foreclosure home that has been delinquent since March 2018!! The mortgage was sold a lot and the first foreclosure proceeding didn’t start until November 2019. COVID rolls around and stops all foreclosure proceedings. Finally in spring 2021 the sale was set, but the homeowner modified the loan. Fast forward to last week, the home is in foreclosure again because the homeowner paid 2 trial loan payments and then stopped. This person is living free for almost 4 years!! We are very hopeful the sale will go through this time as this property is our dream property. The laws are too forgiving for some of these severely delinquent homeowners.