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Will Banks start Renting out thier Foreclosures?

Are banks really thinking of renting out the inventory to lighten their loses? Okay it is illegal for a bank to Rent property. LOOP hole? Of course they form a holding company which allows them to do it? Will Realtors be involved with the process? Will this help the Market or is it just a new can of worms to deal with? It will reduce inventories and allow prices to stabilize?Or is Time the only real answer for today's market problems?

Posted by Darin Haughie on 11/13/2008 07:48 AM

Comments (7)

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7 Comments on Will Banks start Renting out thier Foreclosures?

NOV

2008

I don't think we are going to see banks becoming property managers anytime soon. The inventory in our area of foreclosure homes is moving. The next few months will tell whether the loan modification programs will work to slow down the tide of foreclosures and stabilize our market.

I was discussing this a couple of days ago with another agent...makes sense but probably will not happen!

Capitalism and necessity breed invention and creativity.

I'm sure that there is almost no ultimate roadblock in the way of real estate. Like "life" in Jurassic Park, it will find a way.

Go Capitalism!!!!!!

God I hope not. But something has to be done regarding the glut of bank owned properties. We have had good and bad experiences dealing with some of these deals. One of the best situations we've had has been with a Realtor who always coops 3% to the buyers agent, and many times puts a $2500 bonus on the deal to boot. That does get feet in the door which is half the battle when dealing with these listings.

I think if they really want to speed up their liquidation of these properties they should be able to finance the deals at a set low interest rate. But there is another can of worms waiting if you go down that road.

Banks or property management companies owned in whole or part by the bank will start renting their properties. It is only a matter of time until someone tries to make a profit off a loss. I don't see it happening in my market area as home sales are picking up and short sales are increasing.

Banks (lenders) are gonna do what they've gotta do...they're in business to make a profit. And short of that, they have to minimize or mitigate losses. After all, they have to answer to their stockholders. So whatever that means in whatever market they're working in locally, that is what they will do. Just like what you and I will do to keep our respective businesses going.

Banks that foreclose on multi-family and commercial properties are typically landlords by default. The last thing the bank would do is evict all the tenants from one of these. I seriously doubt they will do it on single-family properties though. They will probably just dump their inventory and cut their losses.

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