Who wins with all of the foreclosures and delinquencies?
Question:
Usually the lender. They collected the fees, get the equity back and get the house back on the market.
The banks. The resell and eventually get their money.
The lender. They get all the money, and when someones late, they foreclose and sell it all over again.
the investor who swoops in and buys it at fire-sale price
huh? dont get u .
The person buying the house in foreclosure.
Actually no one. The banks lose because instead of a return on they're investment the are saddled with homes that might not be worth what is owed, having to pay the taxes and insure that they are kept up, while trying to sell. The person who lost the home loses not only their home but their credit rating. The economy loses because of the glut of homes, and the now inability of persons to buy them.
Lenders don't win because foreclosures net them less than they would have made had loans been satisfied. (Even if they've discounted loans the loan buyers who've taken a beating can't come back for more).
Future buyers win because home prices fall.
buyers of foreclosed properties.
No one. It floods the market with existing homes, therefore building slows down, the economy slows down, and it trickles from there.
Nobody really wins. The people are out a house and now have lost alot of $. The banks our out their loan payments and are stuck with a house that is not worth what they have invested in it.
THe only real winners are the loan sharks that sold these crappy high interest loans to people who couldn't afford it. Because they collected their commissions long before the owners went under.
Other winners would be the investors who have the capital to come in and buy these properties well below market and turn around and sell them for a quick buck. Some of these investors a descent people making an honest buck and others would just assume sale the property back to another unsuspecting person who will lose it again in a few years.
How is it bank can be winning if you stop paying the mortgage?
Banks are losing BIG TIME
Imagine for a second:
You financed 90% of the purchase price, and 6 months later fall behind with payments.
Banks hires an attorney ($3,000), plus lose money every month on non-performing mortgage (6 months X monthly payments), and then at the auction is forced to take the house back cause no one will want to pay 90% of Market Value with 10% due on the day of the auction and the rest within 30 days.
After the house is owned by the bank, they try to sell it with the Realtor. It's 6% commission, several month on the market and then at the end the house will be sold at the discount cause there'll be something wrong with it since people who didn't pay the mortgage also probably didn't care for the property and now it needs some work.
So tell me, my friend, how is it bank wins when you breach the contract and stop paying the mortgage?
guys who specialize in buying distressed properties. banks aren't in the market of holding real estate since it just costs them money (in terms of utility bills, upkeep of the property, real estate taxes, trying to sell it).
In the current market--no one wins.
Believe it or not, most banks aren't out to foreclose on your property. They actually lose a LOT of money in foreclosure. Between the home selling for much less than the amount they financed (if it sells at all), the court fees, the real estate agent or auctioneer, etc. In addition, the more foreclosures a bank has, the less likely their investors are to buy their mortgage portfolios--which means the entire lending system starts to break down.
Obviously the home owner doesn't win. And with houses sitting on the market for so long, even the Flippers don't make much. Actually...the only person who wins is someone who buys the house to actually live in it, not flip it.
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