Dirty Little Bank Secret for Foreclosures

In one of my earlier blog posts, I questioned where was this apparent foreclosure tsunami. As of yet I don't really see an inventory change in the San Diego. In southbay San Diego I have seen inventory prices come down on some of my upgrade buyers, but besides that, no real change in inventory. So the question still remains: Where is the tsunami?

Instead of the storm, let's find the clouds of preparation. The preparation indicator is vacant homes and the disconnect of responsibility between the banks and home owners. 

(Please read more at www.Agent619.com)

If you were to drive around your area, you would see a lot of vacant homes. Now another question. If the owners have moved out and the bank has possession of the home, then why is it just sitting instead of being sold with Agent Jeff Luzadas (shameless plug! )???

To answer this question, I had to turn to some anonymous code enforcement officers in an anonymous city to find my answer (Yes, anonymous to protect the information source, contact me further to discuss). These hard working officials are seeing a disconnect between city vacancy code, ownership, and responsibility. It turns out that banks know of the vacant property and have NOT OFFICIALLY FORECLOSED ON THE PROPERTY. They do this so that they do not have to take responsibility for the utilities, property taxes, general maintenance, or any other extra fees by officially not taking ownership of a distressed property. Also, by not having a toxic debt property officially on the books, the banks can fudge their numbers for investor and stock holder to look good during monthly investor updates. Essentially, banks are passing responsibility back to pre-foreclosure home owners and extending their foreclosure process in excess of 6, 9, or even 12 month and more!

In the meantime, the owners who think that they just solved their real estate problems by WALKING AWAY FROM THE HOUSE, unknowingly have this huge debt growing in their name. The whole time the bank just waits untill the code enforcement officer escalates there claim against the property and eventually the bank takes ownership.
Sneaky huh? Now I know this doesn't happen all the time, but there have been many cases like this.

So the lesson learned, just because a home owner WALKS AWAY FROM THEIR HOME, it doesn't mean that their responsibility isn't still accounted for on some money ledger. Be aware!

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