05-29-2024, 11:25 AM
During the last crash I knew a couple who lost their home to foreclosure, but the bank let them continue living in the house, rent and mortgage free, to protect their interest. I heard that this was not uncommon and I believed it because it made sense. Obviously this arrangement didn’t last forever, but during the hard times it was a win win. (Was this an early example of “you will own nothing and be happy”? I digress…)
There were a lot of foreclosures last time and many of them were due to people simply walking away. When the house’s value dropped to well below the amount owed it made more sense to just let the bank have it. The current interest rate situation might make some people want to continue paying on the house they bought to live in and ride it out, but the speculators are in a different boat. If they can’t at least break even they might as well just let it go. I don't know what the banks do to protect their assets in these cases.
We’re not at that point yet but I believe we will get there.
There were a lot of foreclosures last time and many of them were due to people simply walking away. When the house’s value dropped to well below the amount owed it made more sense to just let the bank have it. The current interest rate situation might make some people want to continue paying on the house they bought to live in and ride it out, but the speculators are in a different boat. If they can’t at least break even they might as well just let it go. I don't know what the banks do to protect their assets in these cases.
We’re not at that point yet but I believe we will get there.