The bottom line is this. Nobody will EVER be able to get as good a deal as these investors do who buy in bulk. They buy in bulk and that is why they get such steep discounts. This is the BEST THING IN THE WORLD for distressed banks. Unloading the inventory and unwinding these non performing securities is the first of many steps. Once the property belongs to these investment groups they can spin em, flip em, rent em, or do whatever the hell they want. It is how we get to a more stable base like it or not.
[/quote]
Gotta disagree with this being the “best thing” for banks. If banks (that are backed by taxpayers, BTW) can get $200K for a property instead of $100K, then it’s best for the banks (and taxpayers!) if the sales are made on the open market.
Since WE own or back the mortgage market and all the “toxic assets” these days, then we need to get the highest possible return on our “investments.”
What we NEED is a federal auction website for all REOs and short-sales in the country. Bidders have to be qualified through Fannie Mae or Freddie Mac, and all bid/ask information must be FULLY TRANSPARENT. It should be mandated that properties be listed immediately upon trustee sale, and that the listing remain for a set period of time (like 30 days). All during that time, the house is available for inspections via govt lockbox, and bids are placed like on e-bay — fully transparent as to the amount and the bidder. Each bidder (can be individual or entity) can get only one user ID, so their bids and purchases can be tracked.
After the 30-day period, the property sells to the highest bidder. If any fraud or problems come up with a particular bidder, they are banned from bidding in any future auction.
Why would we not do this (except that it would make it less profitable for the fraudsters who brought us into this mess)?
