An interesting perspective from Steve Orear, enjoy this great blog!
I am an REO listing agent, and have several REOs at any one time. Lately, I have been wondering when they will start to dry up. There seems to be no sign of it. I didn't get started representing REOs until October 2008 and have listed and sold many REOs since that time.
Where did this REO market come from? In my opinion, it is all a result of loosened lending standards that have lead to a tangled mess in the housing market. The beneficiaries are the first time home buyers and investors who are out in droves buying up foreclosures. I have mixed feelings about those who lost their houses. They range from the family who didn't borrow too much and had some financial event that threw them overboard to the ones that borrowed so they could buy the Hummer and big boat.
I just did an occupancy status check on a property and discovered that all the interior doors had been removed along with the door jams and trim. They didn't stop there. The interior window trim was missing along with the baseboard and floor coverings. What possible value could that stuff have to the previous owner? By the time you tear out floor coverings the result isn't worth the effort unless you are doing it to replace them. Even the dishwasher was gone. It seems like a lot of wasted energy to me.
The sad thing is if the owner actually perpetrated the destruction they could end up paying for it if and when the bank pursues them for a deficiency judgment. So sadly, they really were just hurting themselves.
(Photograph courtesy of timesharerelief40 - Flickr.com)