It seems some of the biggest, most profitable banks in America could be responsible for your property values dropping and your neighborhood becoming less safe as a result of poorly maintained vacant homes. From the Boston Globe:
Two of the city’s top delinquent landlords are not landlords at all. They’re banks.
City officials said Wells Fargo & Co. and Bank of America owe more than $80,000 in fines for allowing many vacant properties in foreclosure to fall into disrepair and blight neighborhoods.
Of course, the banks are using the incredible mess they made of the financial system through sloppy paperwork, legal shortcuts and outright fraud to deny they owe the money.
The situation is another example of the problems created by the modern mortgage market, where loans are sliced, diced, and resold many times by banks and financial institutions, diffusing ownership and, ultimately, responsibility. Banks granted mortgages and sold them to other banks, which packaged them into securities and sold them to investors, which then hired the same banks to collect the loans.
This is a reminder that the victims of Wall Street’s misconduct during the housing bubble actually include millions of responsible Americans who had zero involvement in the bubble, but are simply unfortunate enough to live in a community where the banks refuse to take care of their property. A few unmaintained homes can be devastating to a neighborhood.
With towns still struggling due to the effects of the finical crash, but the banks restored to massive profitability, I think it is time local governments start dramatically increasing the penalties for unmaintained foreclosed property that, now, local taxpayers are forced to take care of.





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So when banks want the good things of the mortgages, then they own the property but when the bad things about the mortgages (and properties involved) come to fore, it’s someone else’s problem.
S2D2
This is disgraceful. I just don’t understand why banks would not want to rent the houses back to the homeowner or to someone else so that the property will be kept up. If the bank owns it, why do they want the place to lose value?
Timmy Geithner, Larry Summers, Hank Paulson, Jamie Dimon, Lloyd Blankfein, and a host of like-minded criminals…Should be in Prison. (h/t to Teddy)
ADX Florence, 23 hour lockdown, for 20 to life sounds about right to me.
There is a house down the street from us that has been vacant for over a year. The foreclosure left a young family with nothing. They had worked to build a life. The husband is a school teacher and the wife had a daycare set up in the house. When the economy tanked she lost most of the clients she had due to job losses.
The front yard is mowed but nothing else has been done. The gate has fallen over and I am sure that homeless people have been staying in the backyard. It needs a new roof. The hvac doesn’t work.
The house is for sale for $95,000. They probably paid around $200,000 for it. It has been for sale for a long time.
Each time I pass this ex-home I wonder about my young friends and their three children. I hope they are ok.
Because they don’t have to pay property taxes on foreclosed properties. If they rent it, they have to pay property taxes AND have the landlord’s responsibilities to maintain the properties. And rental income is taxable as well.
They can also put the “market value” of their foreclosed houses on their books to overinflate the value of their stocks and give even greater bonuses to their CEOs.
It requires a minimal investment of both time and money to get a property ready for leasing, even if just leased back tot he person who lost it.
That’s an investment the bank does not want to make even though it would be more beneficial to them in the long run.
Short-sighted obviously but no one has ever accused any banksters of being at all visionary in any way other than how to screw things up.
I maintain over half of the foreclosed homes in FL for BofA keeping them within code so the banks don’t get fined. You would not believe the shady practices that go on in the business that I am in. In fact just yesterday BofA sent a memo out stating that we are not allowed to refer to these homes as “foreclosed” properties any longer. When hiring contractors or speaking with home owners directly we are only allowed to say that the banks sent us a work order to do such and such. More than 30% that the bank sends us to are not even in foreclosure. But the bank still believes they are. Not only that but we get multiple orders from different banks believing that they all own the note on the property.
Here’s a personal story from one of my jobs that just shows exactly why the economy is in the position that it is in. We had an order to cut a propery’s lawn and trim trees and shrubs and landscape etc. The work order was for $2k. When the contractor we hired arrived at the property another company was leaving and just finished all the work. We called the bank and they said t just go through the mottions and we’ll get paid. So we fake cut the lawn and trimmed the bushes and got photos for all the “completed” work and the bank paid us $2k. I guess it’s better for the bank to hire two seperate companies and pay both $2000 to complete a job in order to avoid a single $200 fine.
Makes sense to me /s
They have to pay property taxes. There is absolutely no getting around property raxes. They are the most senior lien on the property (along with improvement bonds), and must be paid before the house can be conveyed on sale.
The taxes may be delinquent, if so then the investors who own the home have a actionable item, a cost, against the loan servicer.
In simple terms that I can understand, the wealthy won’t take those properties back until it becomes very cheap. They always Buy low & sell high.
One of it’s methods is called ‘Urban Renewal’ and it’s always going on somewhere.
It is a method of profitable property Management for the seemingly never-ending generations of Brahmins who alternate owning property selling – but still having ultimate (Political) control over your “property’,,, in property based ownership systems. The deals sound good sometimes – but it usually just a scam.
The current foreclosure crisis seems a modern day version of Nero’s Fire or Robert Moses Cash Cow & Monster Neighborhood Eating Machine.
Sounds good to me, too.
This story doesn’t surprise me, as there is a foreclosed property on the next street in our subdivision. The gutters are falling down and there is debris in the front yard from numerous storms this year. It looks bad, and no one seems to be doing anything. Maybe it’s time to check with our hoemowners association, and our local county rep, as he’s usually responsive to problems.
Isn’t that the way all big business is working these days? Private profits, socialized risk. It sucks.
Book Salon up with Bruce Levine’s Get Up, Stand Up: Uniting Populists, Energizing the Defeated, and Battling the Corporate Elite hosted by Jon Walker
Didn’t a state pass some kind of vacant home penalty. This would be a great way to increase state revenue, since everyone hates banks anyway.
$US Trillions in 0% reserves benefiting the TBTF banks implies
the nest eggs lifelong amassed by retirees are earning zilch in
support of that policy, so they are surrendering their retirements
to what was in effect a Ponzi scheme after the fact; what’s more exciting: they’re doing that even as the GOP want to privatize Social Security.
(Also, all who made good calls and sold bubble assets are having their
cash that was freed up from those sales earn minimal interest in support of the TBTF banks’ shenanigans after-the-fact too.)
Sadly, it’s not likely the U.S. is around the block yet. The above have been / normally are / still likely are needed to help “clear the market,” and the longer the policies given to bad bankers reign, that will become increasingly more a memory of better government. (The GOP would be worse, but Obama is of course only half-principled, and that much only casually.)
Bernanke just happened to advertise these ideas years ago and so was
a natural call from left field.
http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm
http://www.booktv.org/Program/6451/Ben+Bernankes+Essays+on+the+Great+Depression.aspx
http://www.cato.org/pub_display.php?pub_id=3438
I don’t see him as a prime bad guy.
MSA’s (medical service accounts) would discourage early intervention also in favor of cash for bankers’ Ponzi schemes, absent an ombudsman or relief from cronyism, apart from the breast cancers, melanomas, etc. that would go missed.
I have to say I cannot predict this evening’s weather any more than I can
tomorrow’s interest rates; but, if you saw all that reserve up-marking and the rate the banks are getting from Bernanke, what would you do if you had
an employee extend a low-interest 30-year fixed loan to someone? (Fire him?) (I would.)
Oh, and there’s one more thing.
About what the banks have been doing with those reserves.
Besides the bonuses. Investing aplenty outside the U.S.
These are the essential reasons why I’d like to see Mr. Bernanke replaced by a Co-Chairpersonship. My ideal: Elizabeth Warren, Joseph Stiglitz.
Federal Reserve’s path of destruction
Commentary: Crony capitalism continues
http://www.marketwatch.com/story/federal-reserves-path-of-destruction-2011-04-1?link=MW_story_popular
David Stockman, by way of Marketwatch, April 13, 2011
(and then by way of me, by way of Firedoglake:)
http://sites.google.com/site/evernewecon
They’ll do cosmetic work, but probably not any more actual structural repairs than are absolutely necessary. Paint and carpet are cheap.
I’d start keeping records of all the banks and investment companies that claim to own a particular house, and the ones that aren’t actually in foreclosure even though the banks think so. It might be useful for legal purposes….
Wow I have the same story next door to me. WF foreclosed. People they hired to mow broke both gates. They turned off the electricity, no sump pump, basement flooded, mold grew up the basement walls, up the stairway, up the ductwork, up the laundry chute from the second floor. Flippers bought it for 1/2 what it was worth, did a bunch of cosmetic stuff but didn’t remediate the mold. Couldn’t sell the house because people could still smell the mold when they came through. Finally had to rent it, kept trying to sell it for 120K more than what they bought it for. Renters left because their child got asthma. Flippers moved back in, now on the market for what it sold for in 2003. I am foctado out of my home value because WF didn’t take care of the house for the 2 years it was vacant and the flippers didn’t want to really fix the house. Another common crime here now is people breaking into these vacant houses and stealing all the piping and fixtures, leaving a shell.