- Banks taking people's houses in Jacksonville...then selling them for less than they would have made in a short sale when there was a ratified short sale contract with a ready, willing and able buyer? Yes.
- Banks putting foreclosures on the market well below what others have sold for? Yes.
- Banks putting foreclosures on the market well below what the competition is listed for sale at? Yes.
- Banks making decisions clearly not in the best interest of their investors? Yes.
Where did this fiasco all start? Banks. In the past couple of years it has come out that they gave all kinds of loans that never should have been given. (and we're not just talking about subprime which got much of the blame) Why? Because the banks had no intention of ever keeping the loans. They knew they were going to sell them and would not be holding the bag if and when the defaults started. It was never about them making good loans or bad loans...it was simply about making money.
Why did we experience dramatic increases, then decreases, in the value of our homes? The artificial appreciation caused by the banks giving loans when loans should not have been given, all because they were going to make a quick buck by originating and flipping the loan. Had this money not been available due to relatively new practice of securitization...prices could never have run up like they did.
Once foreclosures started, the market tanked further with each and every foreclosure. This led to sellers being unable to sell their homes if they lost their job, or had other life changing events, or even just needed to decrease their monthly expenses.
We are seeing the banks put new foreclosures on the market below fair market value. Constantly.
This insanity leads to further deterioration in home values.
The next listing that comes on the market will have to be priced even lower, since the comps were brought lower by a new foreclosure. No buyer is willing to overpay in this market. Even if the seller could get a contract for higher, it is likely it would fall out because the appraisal (ordered by the buyer's bank) will not come in at the contract price and the buyer's bank will simply not lend the money for the purchase. This causes the market value to go down and down and down. So when the next guy (or gal) loses a job the price they can sell their home for is even lower and the chances that they will have to sell their home through a short sale (or face eventual foreclosure) will increase.
And so the cycle goes...
The cycle was started by the banks.
The cycle is being fueled by the banks.
The cycle can only be broken by the banks.
At the same time the banks who created this disaster for homeowners everywhere are being bailed out. Many homeowners are losing everything. And these are NOT irresponsible homeowners. Bailout funds and loss sharing agreements have empowered the banks to make more poor decisions. The homeowners continue to be trapped in the insanity of the institutions that have been labeled as too big too fail, but are really just too big to function with any degree of reason.
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