Foreclosure in 95020>Question Details

Swanson596, Home Buyer in San Jose, CA

Are banks as reported in the newspapers holding onto hundreds of foreclosed properties which they plan to release gradually as the market recovers.?

Asked by Swanson596, San Jose, CA Tue Jul 19, 2011

Help the community by answering this question:


Sam Shueh’s answer
If all REOs are released together they will be absorbed in about 5 weeks. In other words, the REO agents longing for more supply as the demand is strong.
As of March 2012, most of these properties have multiple offers.
0 votes Thank Flag Link Thu Mar 8, 2012
Hi Swanson

Actually foreclosures in the county are decreasing, it is a healthy trend.…

There are however higher numbe of distressed properties in Gilroy / Morgan Hill area.

Hope this helps.

0 votes Thank Flag Link Tue Oct 11, 2011
This question is specifically addressed to Gilroy area.
While the rest of communities in SCC area has few and fewer foreclosed properties each month. Gilroy is one of the exceptions.

Jan 2011 July 2011
Auctions 226 245
Bank Possessed 221 275
They are being released gradually which essentially drive the home prices lower.
Keep in mind 95020 has 3.85X more than the county which has 1.4% total default.
In the past when a remote community has good or bad news it signified there is a new cycle.
I interpret that is the beginning of a recovery cycle.
Sam Shueh
Web Reference:
0 votes Thank Flag Link Sun Jul 24, 2011
Yes, banks are holding on to homes in the "shadow market." They have to because if they released all of them they would fail, the market would collapse further, and the country would be in a lot more pain than it is right now.

If banks sold all their property for what they could get for it the value of their assets would decrease because they would be receiving far less than the value written on their books. The decrease in assets would require banks to increase the cash they have, reserve requirements, on hand to pay to customers who may demand it. The flood on the market would drive down housing prices further because there would be a gross over supply.

We have to force banks to sell at lower prices now in hopes that it will stimulate the economy. Homes are way overpriced in terms of traditional valuation when you remove the non-traditional bubbles that drove prices too high to begin with. The whole housing mess is a scam that can only be fixed by lower prices.
0 votes Thank Flag Link Thu Jul 21, 2011
The banks certainly are not holding onto foreclosures by choice in an effort to help the market recover. They all want the foreclosures off the books as quickly as possible. Not only are they paying taxes, but they are putting utilities on in the properties, insurance, maintenance, lawn care and snow removal to avoid municipal fines...heck, add in municipal fines too...etc...Every bank owned property costs the bank money. The reason the banks haven't been releasing foreclosures to the market is due to the robo signing debacle. Here in NJ, every major lender has to prove to two appointed 'Special Masters' (retired judges) that their foreclosure processes are valid. So far (just this week), one has been dismissed and has been cleared to proceed with foreclosure filings. The rest can't be far behind. Nearly every state is going through some sort of investigation not unlike NJ. If you want the actual numbers (or a better idea) google 'shadow inventory'. You will be amazed.
0 votes Thank Flag Link Wed Jul 20, 2011
Hello Swanson 596,
The actual number of foreclosed homes is actually in the tens of thousands that the banks are holding onto and they are supposed to be slowing releasing them onto the market.

Many foreclosed properties were held off the market for investigation due to the earlier robo-signing by some lenders. The lenders can't release them all at once otherwise; home values would plummet even further.

Laura Feghali
Prudential Connecticut Realty
0 votes Thank Flag Link Tue Jul 19, 2011
Hard to tell, and really no way to tell. I know of a property where the owners "moved out" in the middle of the night and the property has fallen into foreclosure. Going to watch and see how long it takes to get to market. I had a listing earlier this year, exact same thing happened and less than a month later it came onto the market as a REO, right next door to our listing. As the first agent suggested, this falls into category of conspiracy theory and of course, which cities and markets we are discussing as they are not all the same.
0 votes Thank Flag Link Tue Jul 19, 2011
I don't think the MANHATTAN project had as much secrecy surrounding it:

I visualize that I'm standing at the bottom of Hoover Dam.......
0 votes Thank Flag Link Tue Jul 19, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer