Will we have an Endless Supply of Bank Owned Properties?

One of our local bankers met us in our staff meeting a short time ago and presented us with the good news, a good number of potential buyers are applying for home loans, but the bad news is very few are actually qualifying for the loans. We are a military town with folks PCSing all of the time, meaning we have people coming and going each year due to changes in duty stations. The buyers coming in are renting because they haven't sold their home from where they are coming from. For the sellers here, I am certain they are looking at all of this with great concern as well as all of my compadres.

Our son lives in Oregon and has been waiting on a short sale for months now. I feel so bad for him and others that have the great credit, money for down payment,able to purchase, and the banks don't even respond to where everything is at. Am I out of place to wonder why things don't move quicker if the banks are hurting so badly with so many foreclosures?

I think the Banks are holding that inventory in the hope that markets will stabilze and perhaps see a bit of gain.  If it does than they can get more from the asset when it does sell.  Besides, they don't care, good ol' Uncle Sam is paying them daily, they are still making money. 

Short Sales? What a joke.  They don't want to Short Sale properties, they make more money if they foreclose. 

We won't see the flood of foreclosures.  The banks are going in the direction of short sales, and sadly, after pretending to do loan modifications.  Actually, they will see their money back on short sales (from the gov't).  Short sales will save the banks money from high foreclosure costs and fees.  In my opinion, short sales are going to be a bigger part of the real estate market.  In my market area, we're also going to see a slow-down of home-buying in the next several months because of buyers not being able to get a loan.  The unemployment rate in my county is 3rd highest in the nation for first quarter of 2010.  It took a Harvard Study to figure out the housing recovery is going to depend on jobs.  Wow!  Thanks for your post, Mark.  Have a great day.

Short Sales may be the ideal way to go for many sellers but....they aren't very successful in our area.  The banks won't even consider them because many of those losing their homes are second home owners, not primary homes.  When it is a second home the Banks would rather foreclosue to punish the buyer for their own poor lending practices of the past.  

I work for a REO Broker here in Mich. He says there will be lots more inventory coming in July. Getting ready here for the inevitable.

Everyone has been worried about this shadow inventory and the 'gusher' that will ensue.  I'm starting not to believe it one bit.  It's been too long that the banks could keep a lid on this amount of supposed inventory.  I've become a disbeliever.

Where is all this shadow inventory?  People keep talking about it.  Is it real?

Now is an opportunity for buyers with the short sales, foreclosures and sellers lowering their prices extremely.  I never thought I would see this in my 31 years of licensure and the ways I was taught by my parents.  WOW, these are times to feel sorry for so many and great for the people that can afford to purchase these homes.  Again, I never thought I would see so many hard working people loosing their home.  My heart goes out to them and my prayers.

The banks are holding onto the inventory because they can declare it a loss on there books and there by increasing there profit margins. If they stretch out the losses over time then the overall balance sheet looks good and the investors are happy.

The trickle is going to come in slow waves...I predict it will take several more years before we fullt recover.

It is my nascent understanding the banks are trickling out the remaining inventory so as to avoid further price weakening in the housing market.  There are some homes near me in NE FL that I have seen go through the trash out process, and sit for months vacant with a non-standard lockbox, waiting to go active on the local MLS.