Homestead mailing list

[Rob <becida AT comcast.net>]

At  5/24/2010 09:13 AM,Gene GeRue wrote:
> Part of the complexity of finding the best business model lies in 
> this fact that borrowers have become more sophisticated and less 
> predictable in their behavior. From viewing homes as homes many have 
> evolved to seeing homes primarily as investments. Socio-economic 
> values have changed. Today, many see foreclosure condition response 
> as a business decision rather than a moral decision. Such decisions 
> are also impelled from the diminishing state of the economy
>
> The many bank-owned properties lacking for-sale signs are, I think, 
> due to this indecision caused by the lack of a business model that 
> deals with the current borrower mindset. I see it as evolutionary 
> justice, the common people getting back at big money profiteers.
>
> Gene

"60 Minutes" did a piece on the people 'walking away' from upside 
down mortgages, just a business decision. It was pointed out that 
several of the big money guys had walked away from big money projects 
when it was clear they were not going to improve their bottom line.
This was to a large extent a moral vs money question, why pay a bank 
$2k a month for a property they could rent down the street for 
$500?  As a business decision it's the banks problem and would the 
bank care if it the problem was going the other way?

Can it be just a business decision for the lender but a moral 
question for the borrower? It can if you can convince the borrower 
it's about morals rather than the bottom line.

The bank owned properties with no for sale signs? There are several 
in my area.
A couple of things I've read talked of bank bookkeeping, if the 
foreclosure process is put on hold part way thru it the property does 
not show up in the 'bad' column, or there are already too many bank 
owned properties for sale in a given area.
Other things talked of the banks not knowing what to do as values 
readjust and people are out of work. If you don't have a job you 
can't afford to buy a house, at least not at the inflated prices we 
had yesterday.

I keep waiting for land prices to 'readjust' out here, $7-10k and 
acre is nuts...





Rob

becida AT comcast.net
Western Washington State, USA