Monday, May 16, 2011

3249 I don't understand - foreclosure

Monday, May 16, 2011

“We need our heroes, but soon there will be no more. Our world will not grow men with the credentials necessary to survive scrutiny.”
-- Jerald Bevens, in a letter to Newsweek --


See this: It's a foreclosed house in Detroit, owned now by the bank, and for sale for $150. It's a nice-looking house, it's been cared for. One assumes that the prior owners were unable to pay the mortgage.

In cases like this, why don't the original owners buy it back for $150? Like I said, the house seems to have been cared for. I understand the concept of "Don't have any money", but $150? Somebody somewhere should be able to come up with a $150 loan.

But you never hear of anyone defaulting and then buying back their home for a song. It just doesn't seem to happen. They have to live somewhere, and renting somewhere else is bound to be more expensive than buying back the house for a one-time $150 payment, closing costs, and the ongoing insurance and taxes - but no more mortgage!

I don't understand.

About the only thing I can figure is that the original owner lost a job, and just dropped the house and moved away.


Badass Nature Girl said...

It's hard to say, but I know that the housing and job market in that area is in the dumps, and has been for a long time, and there's lots of neighborhoods there where more undesireables live than up and up citizens.

Becs said...

The house is probably completely trashed inside. I mean, people have probably walked away with the wiring and the hot water heater. It's a shell for $150 that will take at least $30K - $50K to fix it up. And then you will still be living in Detroit.

The outside might have been given a lick and a promise by the current owner, but they just want the thing off their books.

~~Silk said...

If it's an iffy neighborhood the banks will often allow the previous owners to continue to live there for a nominal rent, as long as they allow unlimited showing, to prevent exactly that kind of thing from happening. And if it does happen, they know who to blame.

You can't see much of the neighborhood from the one photo, but from what I could see, it looked ok.

The bank wants to get it off the books because they still have to pay the taxes on the property, and then they can claim a loss when it sells. They can't claim the loss until it sells, so until then, it's a drain.

The problem is, nothing in Detroit is selling. Period. Not even to empty lot speculators.