Question Details

Danny, Other/Just Looking in Texas

Will bank take less than they bought it back at auction if foreclosure caused by scam not in line with Mkt?

Asked by Danny, Texas Mon Sep 24, 2007

If the bank wants the amount shown on the auction list price where they picked the property back up, then i know that the property is certainly not worth it unless they do all the repairs, etc.
The property was a victim of a financing scam and the banks shelled out 2x the true value - now the banks have a larger mortgage than the property is worth - and the shape its in is in question.

Help the community by answering this question:


banks don't like to lose money.
but sometimes they do
sometimes they go bankrupt
sometimes the taxpayer helps them
not sure


good luck
0 votes Thank Flag Link Mon Mar 24, 2008
No. Most banks are Stooopid ( i had to change the spelling to defeat the language filter) when it comes to market value of the repos. That is why they sit on the market so long, until the landscaping has died and the value has dropped even further. They pay for valuations that Realtors give them. But they do not rely on them. They are so afraid of selling below market value that they start out by overpricing by as much as 2 x or more.

The bank staff is paid salary, not commission, so it is in the bank employee's personal interest to not sell the property too fast, especially when it incurs a big paper loss for the bank. (Job security)

While the goal may be to appear to maximize value for the bank., the need to be able to document and justify the loss is the stronger motivation than a quick dispostion. .

You and I know that the bank loaned more than it should have, but the bank officers that made the original mistakes may still be in the banks employ. The CEO most likely is.

They gradually lower the price, in small decrements, as no offers or low offers come in. Finally when the list price is at or near the real market value, it can be sold.
0 votes Thank Flag Link Tue Sep 25, 2007
Jim Walker, Real Estate Pro in Roseville, CA
Make them an offer and stick to your guns.

If they get squirly on you... say "NEXT!"

You might not even get a response back. Be prepared for that. So who the heck cares?

0 votes Thank Flag Link Mon Sep 24, 2007
The bank does need to get rid of it, so the answer is yes. However, they might not believe you, just like any other homeowner. I made an offer on a REO a year ago and provided them with comps showing why I thought they should sell it to me for almost half of what they were asking. They turned me down flat. It finally sold 9 months later for the exact price I offered.
Good luck,
0 votes Thank Flag Link Mon Sep 24, 2007
Ruthless, Other/Just Looking in 60558
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