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Katy Perry
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2011 Feb 6, 6:00am
So the house that my friends still "Own" because the bank hasn't forclosed in over two years of no payment is.
recorded as a loss each year by the bank?
or
It just pretends the house never existed? I may not have this even remotly correct but wouldn't this be better if you're cooking the books anyways,...just make it disappear,..right? what debt ?? anyone?
I may have this ass backwards?
tatupu70
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2011 Feb 6, 6:02am
Please share then.
Go to the Banks 10K and look it up… learn something instead of being a Real Estate shill.
Thomas--
If there were a rule detailing exactly what % of bad loans or bad debts must be reserved against or how many days old they must be before reserving, it wouldn't be found in a company's 10-K. It would be in GAAP.
I would think you would know that...
American in Japan
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2011 Feb 6, 12:12pm
@Katy Perry
>So the house that my friends still “Own†because the bank hasn’t forclosed in over two years of no payment is.
Someone correct me if I am wrong, but I think the banks hold the asset listed as nonperforming, but valued on the books at bubble prices, Not "mark to market".
bdrasin
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2011 Feb 6, 1:54pm
You don’t get it. There is no such thing as a “bankâ€.
There are people that work as executives at banks that are working in their own best interest And that means keeping the stock valuation of the companies they work for as high as possible long enough to cash out their incentive stock grants. If it all crashes and burns after that, fine. Their interests are not in alignment with the “bankâ€.
This conflict has been recorded over, and over, and over, and over, and over, and over in history, and amazingly people still don’t get it. Even Mr. Greenspan was dumbstruck but finally got it.
I think this is a very profound point, and a very difficult one to deal with. Almost any incentive-driven compensation system can be gamed in some ways, but executive compensation really needs to include a long-term component, with clawbacks and such - but I don't know of any way to actually do this.
All the rules have changed in the last couple of months. Lending banks are now being held accountable for the trap they set, borrowing money they didn't themselves have, while using loose and illegal practices in the process. The massive lawsuit against Wells Fargo / Wachovia, Indymac / OneWest bank, Citibank, Bank of America, JP Morgan Chase, GMAC..............can actually, not only put a stop to your foreclosure, but also pause your house payments with no loss to you............
https://sites.google.com/site/sueyourlendernow/home
FortWayne
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2011 Feb 22, 5:05am
In banking, the traditional logic was always, “the first loss is the best loss†ie move ahead, and dispose of non performing assets as best as possible.
today, banks seemed to have reversed this, and may pay some huge prices for it.1. unpaid taxes add up.
2. non paying owners are unlikely to invest in the home; New roof? screw it let it leak…, dripping sink on the second floor? its not that bad, pool motor out? let it turn green as a duck pond… after all it will be the bank’s problem eventually.
3. theft from abandoned homes. You’d be shocked how many lender owned homes end up missing dishwashers, microwaves, and especially air conditioners.
4. an owner who has left, may rent the home to any kind of crack head renters, since they know they aren’t going to have to deal with it later anyways, the bank will.
Thats our neighborhood.
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This is in response to the article that stated that banks are holding off foreclosing on homes so they don't have to sell there assets at fire sale prices and hoping the housing market will recover enough so they will not experience heavy losses. the problem is the housing market continues to deteriorate, the longer the banks wait the worse things will be in the long run. Sure it makes banks look artificiality good to wall street because they are not taking huge write downs, but a smart bank would be doing the complete oppose. If they foreclosed on all there bad assets now, A. They will most likely get a better price for there assets then waiting when everyone will be trying to unload there assets, better to take a smaller hit now than a larger hit in the future. B. Yes, Wall Street will punish the bank with a significantly hit on share prices, but in the long run, when the bank gets rid of all there troubled assets, they will very attractive to Wall Street in the future. The bank will have little or no troubled assets where other banks will have a mountain of bad assets and with all the banks trying to unload them at the same time, things will get ugly.
#housing