WTF Are Banks Thinking?

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capocorso_IHB

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<p>I posted this house I have been tracking for a few months a while back. The bank had lowered the price from 685 down to 640 over about an 7 month period. About two weeks ago they took it off the market. Today, 213 days after it's initial listing, they relist the property and raise the asking price to 650. </p>

<p>What the hell are they smoking at some of these banks?</p>

<p>http://www.redfin.com/stingray/do/printable-listing?listing-id=895633</p>
 
<p>Banks feel they have a constitutional right never to lose any money, and especially, never to admit that they have lost any money. </p>

<p>Losing money is severely punished at a bank. Even if you weren't the one who did the stoopid thing that lost the money.</p>

<p>If you really want to buy this house, you need to get to a person at the lender who has some real decision-making authority. This is probably several levels above where you will be allowed to talk to anybody.</p>
 
I would not want to be a mid level manager at a bank right now.........banks will go through 4 cycles of mid levels and 2 cycles of upper level managers before this real estate problem is over.



Its pretty funny how many people on these blogs don't realize that banks are not friendly and never will be. It only about money and making sure that it is accounted for and that they do not lose it. Money is hard like steel.
 
i don't think it is the bank. i think it is the listing agent. the bank just set the floor price and the listing agent who got the house to sell list it at whatever they think they can get. they might list it low and try to get some foot traffic but bank won't let it go unless it comes in at what they want. the best way to get this house is make a offer and the bank will counter and then you will know what the bank really want for it. then spend some money and get an appraisal and show the bank that it is not worth that much anymore and they will lower the price.... but all this will take several months going back and forth. or........... you can just hang out and let the market eat up the banks and the real estate agent and the price will go down by itself.
 
I really think it is the banks. The realtors are so desperate now that they are NOT thinking in terms of making a few thou extra if they beef up the price a bit. They would like to sell something. . .anything. . . for any amount of money.
 
<p><strong><em>i don't think it is the bank.</em></strong></p>

<p>You are certainly entitled to your opinion, but you're <strong><em><u>dead ass wrong.</u></em></strong></p>
 
I don't know too much about the banking or RE industry, so correct me if i'm wrong....but if the bank sells this at 400k, (and they had a 700k loan on it), thats a what, 300k loss. Yet if they keep it listed at 650k....well, thats a 650k *asset* they have on the books, no?
 
jbatzmaru



Dude, you are dead ass wrong as No_Vas says.



Quit bagging on real estate types and get a clue. I wish I had the power that you believe agents have!



As I stated on another thread I am involved in a short sale offer with 2 loans and 5 weeks later we still do not have a respones from both of the banks. I am talking about an offer near 1 mill.The bank got an apprasial and our offer is 90% of it and they still aren't responding. You need a little more real life education on these subjects. Since you have never done a short sale, REO, or I believe never gone through a home purchase (excuse me if you have) I don't think you have much validity with the argument that you set forth.



The banks are so overwhelmed and like NanoWest and LL said the current decision makers will have to be replaced before the tough price lowering begins since this group were the ones that made the bad decisions to get themselves underwater.



Soon you will see groups of 15-20 homes sold to REITs and investor partnerships at 40 cents on the dollar since the banks can't handle the "retailing" of the REOs one by one. The really good deals won't hit the street. (rant off)



25w100k+



You are right on the assest versus the loss and it affects their reserves. Often times there are 2 or 3 lenders involved so the loss is spread out and each entity tries to migitate their own portion of loss. Its a mega CYA!





Regards
 
<i>"Its a mega CYA"</i><p>


Exactly. And that is all it is. It is not the bank manager's money. It is his ass. He care about his job. He doesn't care if the house is priced per the market or not. All he cares about is that he covers his ass.<p>


xsc - Are you thinking maybe we ought to form a partnership to buy some of these turkeys?
 
Well, I happen to work at one of the banks, though I have nothing to do with mortgage or residential real estate. However, those people work in the same building. They discuss the market etc, at lunch.



I'll give you a few likely reasons for what you are seeing. 1. The staff they had 6-12 months ago was for making loans, not many people were there for workouts. Different people, different skills. You have to staff up pretty quickly, or retrain pretty fast to deal with it. I suspect that's also one of the reasons many banks seem to be letting loans go longer before filing NODs. 2. There is a bewilderment, not quite denial. The defaults have gone hugely up. Transactions have gone hugely down. Interest rates keep moving around, mostly down lately. 3. There is an alleged bailout package about to be signed, and there may be more. This is one place where I think the banks were fully justified in pausing on taking big losses on individual homes. There were so many bailout proposals that could have so many different effects that waiting 1-2 months might not cost that much.
 
awgee



You bring some of that gold. I think 18-24 months will be time to buy.



W2Buylater



We can put something together. With your money and my charm.....LOL



A lot of times agents do have long time buyers and connections with the REO department. Lots of the better deals really don't make it to the street. Getting tight with an REO person is great since anytime you can make another persons job easier they are apt to hepl you.



Enjoy!
 
yo....... i am not bagging on real estate agent but lets face it.... there are alot of dumb ones out there. and some slick ones.





example 1. 6601 sutton street. westminster. bank wanted 500k it was a short sale. agent listed for 399k to get foot traffic. agent got tons of offer in and she did not even submit it to the bank. instead she counters it on behalf of the bank at 500k and sees who comes back. agent caught one fish apparently because the deal went though and close escrow on 1/15/2007. and sold for 460k.





i am not saying 100% sure that is what is happening with every house but i seen it before and i am only offering my opinion. i am sure it took a long time cause this all started back in october ish..... almost 90+days.
 
So are you all saying making lowball offers to banks a year from now is pretty much not going to be the way to go?

Call me a wuss but I figured it would be easier low balling banks than homeowners.
 
I can tell you lowballing banks is like beating your head against a concrete curb.



It only feels good when you stop, and it's only slightly less effective.
 
It might work in a year or so when the examiners/regulators really get on their case. Or, if they hire some workout specialists from other industries, like car or consumer financing and give them the authority to let'er rip.
 
<p>On that note:</p>

<p><a href="http://lansner.freedomblogging.com/2008/02/09/insider-qa-talks-builder-bankruptcies/#comment-48408">http://lansner.freedomblogging.com/2008/02/09/insider-qa-talks-builder-bankruptcies/#comment-48408</a></p>

<p> </p>
 
copocorso



The opposite is what I think the general feeling of the experienced folks here are saying. In a year or so will be the time to make low offers to the banks. Until that time the banks aren't in the negotiating mood.



jbatzmaru



Keep in mind that the duty of the listing agent to the seller is to get the best deal possible. Its back to understanding "agency". It would be the duty of an agent representing a buyer to get the best deal for the buyer. Again we are covering ground already covered. If you don't believe that an experienced agent can fairly represent your side then I understand your position. I stated I am involved in a short offer where we came in under listed price and under the apprasial the bank ordered. Still no response. We are trying to get our buyer the best possible price. We may get nothing at all based on the banks lack of response. That is the way the game is played. I enjoy getting my clients good deals and "winning" for them. This is the 3rd offer for this client and we have been working with them for 10 months. Its a long term play.



Good clients are as hard to find as good agents.





Enjoy the experience.
 
xsc and w2bl - Minimum $100,000 buy in. Make offers in 2011 for a maximum of 10 REOs at a time. 50% leverage, or maybe none.
 
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