A Huge Housing Bargain -- but Not for You

[south]

A Huge Housing Bargain -- but Not for You

http://www.thestreet.com/story/11224...t-for-you.html

[ilovedomains]

http://www.thestreet.com/story/11224...t-for-you.html
"The largest transfer of wealth from the public to private sector is about to begin. The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors -- vulture funds."

And whats in Obamas jobs bill??? 15 billion dollars to fix up these forclosed homes. How convenient.
http://www.inddist.com/Content.aspx?id=1755

[Gerry]

In the process, these investors will instantaneously become the largest improved real estate owners and landlords in the world. The U.S. taxpayer will get pennies on the dollar for these homes and then be allowed to rent them back at market rates.

---------- Post added at 01:27 PM ---------- Previous post was at 01:25 PM ----------

The investors in this program have been waiting for this opportunity since the portfolio of homes owned by HUD began to spike in 2007, when foreclosures surged first in the "Rust Belt," principally Ohio and Michigan.

Even before this crisis occurred, HUD, i.e. the U.S. government, was the largest improved real estate owner in the world, because of its portfolio of foreclosed homes, which is classified as "real estate owned" (REO). The entire massive HUD REO Portfolio is quietly managed by a handful of private firms already, a group listed as Management and Marketing Contractors.

---------- Post added at 01:31 PM ---------- Previous post was at 01:27 PM ----------

Why am I not surprised?

Some of the very fund companies responsible for this collapse are going to profit...again, again, again, again.

They profited from the sale of these junk mortgages, they profited from short selling these junk mortgages, they profited from being bailed out, now they will profit once more for paying pennies for the homes they once underwrote.

It boggles the mind trying to rationalize all these behind closed door hand-shake deals. At every step of the way, these agents and agencies got bailed out 100% on the dollar, made money off of those bailouts, and now continue to gain at the taxpayers expense.

[draggar]

My HOA is already suing banks over back-owed association fees (they're actually foreclosing one unit from a bank). I wonder how much HOAs and other associations will get screwed out of because of this.

[Gerry]

My HOA is already suing banks over back-owed association fees (they're actually foreclosing one unit from a bank). I wonder how much HOAs and other associations will get screwed out of because of this.

I think they can kiss those fees good-bye. Even if the HOA files a lien, with all the red tape involved in trying to collect the money as well as the legal wrangling, the HOA will get nothing. When a property sells, the proceeds go to the deed owner. In this case, the deed owner is also the holder of the first lien ... the bank. Typically, the proceeds from the sale (or even an auction) go to the holder of the first lien and the proceeds are credited to the first lien holders credit note (loan). Anything above the satisfaction of the first lien holder will go to second lien holder, etc. The HOA is going to be further down the list in rankings of filing a lien against the property.

Since these homes are foreclosed, they will sell for an amount significantly less than the amount owed. So all the money will go to the first lien holder (the entity the holds the title).

Doubtful that these laws will be different in Florida. The only way I know of a bank being bumped down the list is if the former homeowner is in arrears with the IRS. The IRS trumps everything.

A scenario: If the bank holds the title to a house with a loan amount of $100,000 (not the fair market value but the actual money owed to the bank) and the bank decides to auction the house. The bank is lien holder 1, the HOA is lien holder 2. Suddenly the IRS steps in and says the former owner is in arrears of $25,000 in back taxes. Now, the IRS is lien holder 1, the bank lien holder 2, the HOA lien holder 3.

The home sells for $70,000 at public auction. The proceeds used to satisfy the lien of lien holders. In this case, $25,000 to the IRS to fulfill the IRS back taxes (paid in full) and $55,000 to the bank (lien holder number 2) which is short $45,000 from satisfying the note. Since the sale was short $45,000 from fulfilling the loan amount, there are no proceeds from the sale to pay the HOA (lien holder 3) or anyone else who has filed a lien against the estate.

[draggar]

Florida law is OK compared to other sttes - the association will get either 100% of the back due fees or 1-2% I forgot the exact number) of the selling price - whichever is lower. But from the day that the bank takes the unit (successful foreclosure) they are responsible for 100% of the association fees and any special assessments. HOAs can legally foreclose on a bank owned unit.

[Raider]

And whats in Obamas jobs bill??? 15 billion dollars to fix up these forclosed homes. How convenient.

Please call if for what it is, Obama Stimulus II

[bigboydog_0]

tell them to list all the houses on CasasBaratas.com

[Gerry]

...the association will get either 100% of the back due fees or 1-2% I forgot the exact number) of the selling price - whichever is lower.

That's quite a range.

I have never lived in an HOA neighborhood (I do own undeveloped land in associations). What is a typical HOA monthly fees in Florida and what does it cover?

[Mike Cruz]

That's quite a range.

I have never lived in an HOA neighborhood (I do own undeveloped land in associations). What is a typical HOA monthly fees in Florida and what does it cover?

If you are lucky, $150, up to $600/month depending on your location. That covers mostly just lawn care for common areas, maybe security and usually for town house type neighborhoods, actual lawn care for each home. Most HOA's are rip offs and run by power tripping scum bags.