I’m the first to admit that I am no expert when it comes to the housing market. But I thought it was the period BEFORE the auction date that had become very long, and that once a house actually went to auction it was only a matter of a few weeks or months before it hit the MLS. Either the bank took back the home at the auction and put it up for sale as an REO, or an investor bought it at the auction and sold or rented it out. (And for the larger and more expensive properties, investors usually go for a profitable flip).
If I understand you correctly, you’re saying there’s a third option – the house goes to auction and … then what? The bank takes it back and just keeps it in shadow inventory? But then why would the bank go through the hassle of foreclosing and having to deal with owning a now empty home where who knows what might happen?
