'Shadow REO': As Many as 90% of Foreclosed Properties Held Off the Market
http://www.thestreet.com/story/11616596/....

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But Realtors who want more bargain-priced homes to sell may not get their way anytime soon. Foreclosed properties are an extreme liability to lenders, holding the potential not just to dent their profits but to actually bankrupt them altogether.

yep- the money shot right there
I'm starting to think they will never release those properties, they will be empty forever

There is a house 3 doors down from ours that the people moved out about 2 years ago. Since that time, no one has been inside and no signs have been placed anywhere on the property. We know the owners who lived there have split and are living separately so I assume a divorce is in the works. However, I'm surprised that the bank hasn't tried to sell the property since it's a fairly hot neighborhood in terms of sales.

The problem with not releasing the properties should be cash flow. Eventually the lack of cash flow should be a problem. I figured we would be well past that point by now, but a lot of crazy **** has happened. Apparently banks can hold onto billions in nonperforming assets and still make record profits.

We live in a perverse world.

Fannie and Freddie are still paying the mortgages so what do the banks care?

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I'm starting to think they will never release those properties, they will be empty forever

Which has no effect on anyone's income, assets or quality of life.

What could possibly be negative about 10% of the homes in the USA sitting vacant?

When the home is taken it was to be sold on the courthouse steps? How can the bank not fork over the cash to the mbs holder and keep the home?

My neighborhood in Central FL has its fair share of empty homes. Recently, most of them have been listed. One sold in days in a bidding war. The one across the street from us has seen action (lawmowing and picture taking) after what looked like years of neglect. (I found a listing on Zillow where it was a short-sale in 2009 but never sold). The front shrubs have grown taller than the roofline.

Things are coming on the market here in FL. We also have homes being abandoned with stuff piled out front as folks get kicked out. There looks to be plenty of homes in the pipeline, and of course, the next leg down in the economy will see even more folks fall behind and get displaced.

Andy, the banks are not completing the foreclosures. Instead they are allowing homes to sit in limbo for years. It is combination of them not wanting to take the losses by going REO, and not even knowing who the real owner is in the first place. Ofter it takes over 1 year for the bank to figure out the correct foreclosing entity, (Some MBS trust).

Those houses are decaying the longer they sit. Won't be worth much by the time banks get around to selling.

Their only goal is to keep prices high....having a million homes rot is great as they will need to be torn down (jobs) and rebuilt (jobs). As long as neighborhoods do not decay it is a win for them. The losses on their balance sheets get diluted into baskets of loans with performing loans and over time, the healing process of new loans being paid will eventually clear the books.

Ot at least that is what they tell us hahaha. Looking at price to book it would seem we have many years to go before banks regain solvency. I suppose the best way to do this is to raise cash and getting people to pay too much every month is a great way to raise cash.

i would like to see some real DATA.... how many are in foreclosure.. not late.. not NOD.. but actually bank owned..

The data is out there Laws, but the majority are in limbo. It takes something like 2 years for the bank to get to REO. I am seeing many housing that appear to have done some government modification program a couple a years ago go back into foreclosure.