Question: At the end of the month many banks will write off the bad housing debt they have. What happens to those houses? How do they get a value put on them for resale that reflects their worth in this market.
Thanks.
If you’re asking how foreclosed properties are marked, in this area…
The Sheriff has an appraisal done (this value is typically low), the property goes to auction and is sold to the highest bid. Should the bank be unhappy with the bids, it has the option of bidding to take the property back. Should they do so, they then market it themselves.
Kai
What value does the bank use on it’s balance sheet if the house does not sell?
~Matt
Do banks actually hold any mortgages? It is mainly investment houses.
I dunno what value they use on their balance sheet, I’m slow.
They always sell, at least around here. The bank buys the property back if they have to.
Jeez, here I am on line when I should be working. I’m probably wrong, but once foreclosuyre happens, isn’t the asset off of the books? Should the bank repurchase the property, I’d wager it goes on at the pruchase price.
Or perhaps it goes on at the speculative 5 year value of an over appraised mortgage which has been insured, traded and hedged?
Out here in wheat country, we just buy and sell on a handshake at the coffee shop. The Ag bank keeps its loans in house and all the seed, fertilizer and those big green tractors are paid for (hehe)…