So Just How Much...
...(on average) does it "cost" a bank to go through with a foreclosure, versus letting me rescue it in pre-foreclosure? What are the variables affecting the bank's cost? I've heard that it costs a lot of money for a bank to foreclose, but don't have a grasp of what that means.
Thanks for any insight!
It is my understanding from a couple of friends, that all people involved on the bank's behalf, all are "in-house" employees.
My question to this person was why I am able to buy all of my properties for pennies. She told me the bank isn't in the real estate business. The bank makes money when they do short sales??? That is what she said. Everyone is already getting paid regardless if one property is foreclosed on or ten properties in one area.
That is why I don't go to auctions or do short sales. You can get good deals I would rather wait and get MEGA GOOD DEALS. But that also depends on the market in different areas.
So if my source is right it basically doesn't cost them more than the postage. Once it is REO then they do have to pay the Real Estate Agent.
Good Luck
Lori
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While it is true that MOST people involved are bank's employees, it still costs the bank to go throught he foreclosure process a lot more then just postage. Trustees are not bank employees, and they charge quite a bit.
Like Lori mentioned, they also have to pay realtor fees.
Additionally, for every non performing loan the bank has in its portfolio, it has to keep a certain money in reserves, which is money not lent out to consumers, thus less income.
Short sales - the banks don't MAKE money, they are MINIMIZING LOSSES, IMHO.
While the banks are not in the real estate business, banks are still in business of making money. If a BPO (brokers price opinion) is that he value of the house is 200,000, I seriously doubt a bank will get rid of it for half of that. Even though these deals do happen occasionally, they are pretty rare.
Vasiliy
Quote:
On 2004-05-19 10:16, tinman1755 wrote:
It is my understanding from a couple of friends, that all people involved on the bank's behalf, all are "in-house" employees.
My question to this person was why I am able to buy all of my properties for pennies. She told me the bank isn't in the real estate business. The bank makes money when they do short sales??? That is what she said. Everyone is already getting paid regardless if one property is foreclosed on or ten properties in one area.
That is why I don't go to auctions or do short sales. You can get good deals I would rather wait and get MEGA GOOD DEALS. But that also depends on the market in different areas.
So if my source is right it basically doesn't cost them more than the postage. Once it is REO then they do have to pay the Real Estate Agent.
Good Luck
Lori
Every area of the country is different. So what the banks do in one area makes up for the losses in another. Due to all of the recent scams in Cleveland, most of the lenders I use have pulled out of that market completely. It has been my experience that your technique to get deals in WA would do me absolutey no good in Pgh.
That is why I can buy houses that have $75K owed for only $25K. Our market is a buyers market. Noone want to buy properties that were built in the late 1800's and early 1900's. We didn't even have 50 states then.
The market and the economy is different. But most of the BIG Banks are in CA. The foreclosure process costs are absorbed. This is what I have been told by my sources. The banks are in business to make money. That is why they have are in house people to absorb most of the costs.
Lori
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mortgagee foreclosure costs include attorney fees, property preservation, forced placed insurance, property taxes, acquisition expenses, and liquidation expenses.
No lender will really share with us their true costs to foreclose, but I'd estimate that they would have to spend anywhere between $10,000 and $15,000 or more to foreclose, take back, hold and liquidate. Much depends upon the foreclosure laws and customs in your area.
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