325 foreclosed homes up for sale at mass auction
Real Estate Disposition Corporation, a California company, will auction 325 homes at the Minneapolis Convention Center this weekend. The Pioneer Press calls it “another troubling sign of the times.”
The mass foreclosure auction is actually a revival of sorts. They were also popular following the savings and loan collapse in the late 1980s.
I have to wonder many of the investors who show up and buy will end up in foreclosure themselves. This sort of quick sell convention is surely good for banks, but it doesn’t seem like the best way for a buyer to make an intelligent, calculated investment decision.
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[...] Original post by Caveat Emptor [...]
[...] foreclosure rate, “mass foreclosure auctions” have become popular. According to Sam Glover’s Caveat Emptor, such mass home auctions were popular during the savings and loan collapse in the late [...]
The Wall Street Journal Online has an interactive map showing the percentage of high interest rate loans in each state and metro area. (not all of which are subprime) According to WSJ, high interest loans are “Those having an annual percentage rate of at least three percentage points above a Treasury security of comparable maturity for first-lien loans and five percentage points for second-lien loans.” The map shows that in 2004 13.3 percent of MN mortgage loans charged “high interest rates”, in 2006 that number nearly doubled to 26.1 percent. It will be interesting and scary to see how these numbers increase as option arms begin to expire.
I’ve heard a lot about how the government has encouraged financial institutions to negotiate with customers in order to avoid foreclosure. Sam, have bank’s been responding to these encouragements? In today’s world of securitization it must be difficult to get all the interested parties to sit down and agree to a creative solution.
Here is a link to the WSJ information: http://online.wsj.com/public/r.....IME07.html
It would be hard to draw a conclusion from the limited number of cases I see, but I think banks are starting to get better about negotiating. However, I also think the burden is on the borrower to show that there is a reasonable (to the bank) payment they can afford.
One major obstacle is that banks usually will not negotiate while the borrower is still making payments, even though the borrower swears they will not be able to continue to pay, whether the reason is good or bad.