Sunday, 25 July 2010 04:49

Anecdotal Evidence That Banks Are Hiding Depressed High End Real Estate

Why are Banks Hiding High End Residential Real Estate? Courtesy of the Real Estate Channel:

  • Without the FTB tax credit, the housing market is receiving artificial demand and price support from the FHA loan guarantees and banks sitting on mortgages of homes once valued at $300,000
  • Banks in areas that were severely damaged by the downturn in domestic real estate (Cook County, Illinois, Miami-Dade County, Florida, Orange County, California) have significant inventories of homes worth more than $300,000 that they will not put on the market, even after foreclosures lasting more than 2 years

According to Bruce Krasting over at Zero Hedge, the FHA is "Officially Broke" anyway: FHA – “We are Officially Broke” After perusing the data above, one would wonder why... (Link to FHA/FR)

SUMMARY: A recently issued independent actuarial study shows that the Mutual Mortgage Insurance Fund (MMIF) capital ratio has fallen below its statutorily mandated threshold.

More Reggie Middleton on Residential Real Estate:

As I Made Very Clear In March, US Housing Has a Way to Fall

Recent Mortgage Loss and Credit Performance Commentary

This is the public version of our quarterly review of Alt-A and subprime mortgage performance sourced from the NY Fed and FDIC data. All paying subscribers can access the entire document here: 4Q09 Alt-A and Subprime commentary (452.33 kB 2010-05-21 05:49:09).


Last modified on Sunday, 25 July 2010 06:31


  • Comment Link Reggie Middleton Sunday, 25 July 2010 09:10 posted by Reggie Middleton

    There is an example right down the street from me as well. I will post a picture later on to illustrate. A long abandoned shell (roughly 5 years). This house is in the $600k to $900k range. Then there is another one, a lot with simple 2x4s and the remnants of a rook, the victim of litigation about 4 years after foreclosure, still there, in the $800k to $1.3 million ranges.

  • Comment Link Mark Hankins Sunday, 25 July 2010 08:41 posted by Mark Hankins

    Here is a case in point, right down the street from me:

    This case has not progressed in almost two years. In Florida, the Defendant would in fact be entitled to have it dismissed after a year of inactivity under our Rules of Civil Procedure.

    The home sold for $440k in 2006, it's at 21527 WILDERNESS LAKE BLVD and you can look it up here:

    Note that this is "shadow inventory" ... BAC Home Loans has not taken title to it, but undoubtedly at some point they will. For right now it sits vacant (with BAC doing zero upkeep). The vacant home next to mine is also not on the market, although the lender is having a lawn service come at quite regular intervals.

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