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Banks Walking Away from Foreclosures

  • March 31st 2009

by Mark Wellborn

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Banks Walking Away from Foreclosures: Figure 1

Something weird, but perhaps expected, is happening in the housing market: Banks are walking away from foreclosures. According to The New York Times, financial institutions are deciding against taking possession of certain properties because the costs (legal fees, maintenance, etc.) are exceeding the actual value of the home.

Experts say that a soft housing market and the disrepair that a house can fall into as it sits empty awaiting its fate are two major factors that result in the bank’s decision. And when they decide to walk away, the troubles just come back to the property owner.

From The Times:

“The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure.”

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/banks_walking_away_from_foreclosures/737.

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