BiggerPockets

The REO fallout and its implications,

California, the most populous U.S. state, reported 64,683 foreclosure filings, the most of any state and up 112 percent from April 2007.

Saccacio noted that this also meant an erosion of property tax bases, which was putting municipal budgets in peril.

" For example, the city council in Vallejo, California - part of a metropolitan area with a foreclosure rate that ranked sixth highest in the nation in April - last week voted to have the city file for bankruptcy," he said.

http://www.cnbc.com/id/24609981/site/14081545/

Yet banks are sitting on inventory instead of releasing or fixing what's broken? Manipulation of writedowns, fudging accounting, etc

Simply asinine....... :roll:

Jack is not one of my favorite authors but has some decent insight here,

Portfolio lenders have replaced only part of the shortfall left when investors deserted temporary lenders. The portfolio lenders live in the same world as secondary-market investors, see the same frightening data on foreclosures and have tightened their underwriting requirements across the board. Further, many are constrained by capital requirements, especially those who participated in the secondary market system as investors and have suffered capital losses.

The upshot is that, just as many loans were made during 2005 and 2006 that should not have been made, today there are loans that should be made that aren't. Further, the prices of all deviations from underwriting perfection contain a " fright premium" and are therefore higher than they ought to be. That is true even in the conforming market, where Fannie Mae and Freddie Mac have raised the price increments on borrowers with less-than-excellent credit.

This semi-paralyzed market will continue until investor confidence is restored. Key players are the investment banks and hedge funds who sold MBSs when prices were high in expectation that they could buy them back later at lower prices. At some point, they must go into the market to cover their short positions. They will do that when they decide that MBS prices have reached a bottom.

http://www.washingtonpost.com/wp-dyn/content/article/2008/01/04/AR2008010402118.html

:beer:

Yeah, but property taxes are based on an assesment of value, as property values decline, so do taxes.

Imagine the flood of work that is going to be created for the county courts and sheriffs by evictions/lockouts. I hope the small po-dunk counties have their waders on.

We already run into problems coordinating evictions/lockouts with these two entities. Some times evictions can take 90 days after the foreclosure sale. One debtor has been in his home for more than 2 years after the foreclosure sale because he knows how to work the system. Just imagine if everyone caught on. :crying:

This is only partially true... the bills are paid at the closing table BY THE SELLER... in this case by the REO holding bank. Thus, funds are being held from the taxing authrouty until closing, sometimes for years.

Perhaps banks are starting to not paying their tax bills in your area, so far in my area all of the REO's that I have either researched (which have been many) and/or purchased, the banks have been update on the taxes or have paid taxes at closing. My last experience with Fannie Mae, tells me that they certainly won't be telling too many offers to piss off. They appear to be more then willing to negotiate even when the offer is 50% of the listed price, which used to be unheard of.

As far as assessed value. My county allows you to file for an appeal once a year and I can promise you that these banks haven't even though about filing an appeal with our county over a 20K discrepancy in the assessed value and the county or city certainly won't lower the value on their own.

Maybe in your Bulk world things are different, but I can tell you as an individual that working with REO's has become much easier.

As I mentioned Tom,

This is the Bulk Reo topic area and all I deal with is multiple unit acquisitions....

If your banks that are representing REO are maintaining their tax base (unlikely) that's great but as the " author" of the article stated cities across the US are suffering huge revenue losses

Cheers mate

:beer:

Thank you Michael

I hope your part of world is doing well

:beer: