Shadow Inventory – When Will It See Light?

By
Real Estate Broker Owner with Aspen Lane Real Estate LLC

 

shadowsShadow Inventory – When Will It See Light?

 

 

Did you realize that according to USA Today there are approximately 1.6 MILLION homes in the nation’s shadow inventory?  These are foreclosed or bank owned properties that are sitting vacant and sitting on the books of the nation’s banks but have not been listed for sale.  Many banks think that it is better to wait until home prices are stronger before releasing these homes for sale in hopes of recapturing some of their losses.  Standard and Poor’s estimates the shadow inventory at about $405 BILLION. 

 

While watching 60 Minutes Sunday night, my heart ached for the people in Cuyahoga County, Ohio where the City is demolishing thousands of vacant abandoned homes.  The banks foreclosed on the homes but refused to take on the responsibility of preparing the homes for sale and vandals had destroyed the homes such that they are being demolished.  It is such a sad state of affairs.  The remaining neighbors are watching their values plummet daily. 

 

I don’t understand why the banks are so eager to foreclose.  If they would make it easier for folks to modify their current mortgages, so much of this devastation could be avoided.  Instead, they make it nearly impossible for most homeowners to get the assistance they so desperately need.  If someone high enough on the food chain at one of the mortgage banks could somehow cultivate an original thought that wasn’t verbatim out of the policy manual and realize that they could actually make a difference in our world, it would be a miracle. 

My suggestion is that the banks call the homeowner when they see that they are having trouble making their mortgage payments.  Not a collection call, but an assistance call.  Just think if the banks reached out to the struggling masses and offered to assist them with a loan modification so that they could stay in their home that they worked so hard to purchase in the first place.  Certainly someone at these financial institutions could figure out that a loan modification is so much better for everyone than another property to put on the shelf in the Shadow Inventory closet.

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Re-Bloggged 2 times:

Re-Blogged By Re-Blogged At
  1. John McCormack 12/19/2011 07:36 PM
  2. Will Hamm 12/19/2011 11:52 PM
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Comments 9 New Comment

Rainmaker
915,490
Belinda Spillman
Your Real Estate Resource For Life!
Aspen Lane Real Estate LLC

Jerry.  It was such a sad show.  My heart ached for those poor folks. 

December 19, 2011 06:24 PM
Rainmaker
460,082
Judith Parker
CRS, GRI, CMRS, Charlotte, NC
ProStead Realty

Hi Belinda, what a different situation it could be if the banks did reach out and offer your suggested... "assistance call."  This is so sad and there are still so many houses that have not yet hit the market.

December 19, 2011 08:03 PM
Ambassador
1,174,520
Toni Weidman
23 Years Selling Homes in New Port Richey, FL
Re/Max Sunset Realty

I can't figure out why they don't work with the owners and work it out. They are going to lose the money anyway so why not let the owners stay. It's like they are punishing them.

December 19, 2011 08:22 PM
Rainmaker
309,249
Vern Eaton
Realtor 320-630-6995

I know that many areas are hurting and there are a lot of homes vacant. |But we never hear the good side where areas are growing and values are rising.  My area has a few homes for sale, but not like a year ago.  Driving around there are not all that many homes vacant. 

We need to hear more good news to give people some hope.

December 19, 2011 08:38 PM
Rainmaker
592,839
David Shamansky
Creative, Aggresive & 560 FICO - OK, Colorado Mtgs
US Mortgages - David Shamansky

you would think that makes sense but thats where that great idea ends. Banks dont care when the govt takes our money to give to them and then implements programs to help others that the ones who took tax dollars dont honor there is no doubt the system is not designed to benefit anyone other than them.

Sad but great article - caught it on Q's reblog

December 19, 2011 09:52 PM
Rainmaker
915,490

Belinda Spillman

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