Crazy, crazy, crazy. One of the agents in my office recently got an assignment for an REO. How exciting!. Agents love REO assignments, and this wasn’t his first.
Here’s the crazy part: When I was going over the paperwork, I noticed that the property had been foreclosed upon by the lender in 2008. I couldn’t believe it, so I actually asked a title company to double check that date for me. And, yes, it was true.
So, here’s the clincher: the property is still occupied. (Talk about livin’ large; that’s three years without making a payment on anything except utilities.)
In our constant mumblings and grumblings about the distressed property market, we always talk about the famed shadow inventory. We wonder when the banks will unleash the shadow inventory of REOs on the world and we also wonder how that will impact the housing market.
Recently, I’ve heard rumors that the banks are going to be selling their inventory in bulk. And, there are public discussions about the plan to convert these bank-owned properties into rentals. (Talk about a field day for property managers.)
But, I digress. It seems to me that allowing individuals to live in properties for years at a time probably isn’t a good thing for our national economy. That being said, with all the money that those folks I mentioned saved in rent, they were able to help infuse our local economy with more hard, cold cash—shopping at Target, going to the movies, hitting the malls.
So, what’s the world coming to? Is it better for the economy for banks to hold these properties back or rent them out? Or, is it better for sellers to avoid foreclosure and sell their properties in a short sale?
What say you?
Photo: flickr creative commons by respres