Time: Bulldoze: The New Way To Foreclose

[China]

Bulldoze: The New Way To Foreclose (http://news.yahoo.com/bulldoze-way-foreclose-102000063.html)

Banks have a new remedy to America's ailing housing market: Bulldozers.

There are nearly 1.7 million homes in the U.S. in some state of foreclosure. Banks already own some of these homes and will soon have repossessed many more. Many housing economists worry that near constant stream of home sales from banks could keep housing prices down for years to come. But what if some of those homes never hit the market.

Increasingly, it appears banks are turning to demolition teams instead of realtors to rid them of their least valuable repossessed homes. Last month, Bank of America announced plans to demolish 100 foreclosed homes in the Cleveland area. The land is then going to be donated back to the local government authorities. BofA says the recent donations in Cleveland are part of a larger plan to rid itself of its least saleable properties, many of which, according to a company spokesperson, are worth less than $10,000. BofA has already donated 100 homes in Detroit and 150 in Chicago, and may add as many as nine more cities by the end of the year.

And BofA is not alone. A number of banks are ramping up their efforts not just to rid themselves of their unwanted homes, but to fully dispose of them. Fannie Mae has a program to sell houses to local municipalities for around a few hundred dollars. Wells Fargo has donated 800 homes to be demolished since 2009. JPMorgan Chase says it was one of the first banks to begin donating houses it couldn't sell, or didn't think were repairable. Since 2008, the JPMorgan has donated or sold at a discount 1,900 houses to city or county officials.

The banks do the deals because once the properties are donated they no longer have to pay taxes or for upkeep. Tax experts say the banks may also be able to get a write off for the donation. That appears to be a better deal than trying to repair some of these homes, which according to a BofA spokesperson are more economical to demolish than fix up.

Click on the link for the full article

[PeterMP]

I saw a story about one of the smaller cities in PA or OH trying to survive. I probably saw it here. Essentially, the city was trying to shrink. They were encouraging residents to leave sparsely populated neighborhoods and move into others. This allowed the cities to focus resources and the like and saved them money.

That wasn't working too well because some people had been in the neighbor hood for a long time and didn't want to leave.

Seems like this could go hand and hand with those efforts.

[Larry]

I'm having trouble figuring out why it's in the bank's interest to get write off the value they loaned on a property, then spend money demolishing it, then take $0 for it.

Unless they're writing things off at fraudulently inflated values, or sticking the government with their "losses", or some such.

[Predicto]

How incredibly wasteful (unless this part is always true: "some of these homes, which according to a BofA spokesperson are more economical to demolish than fix up.")

I'm sure that some people would love to be able to move out of crime-ridden public housing projects into a home of their own.

[zoony]

why stop with bulldozing just a few houses in Detroit? Gas that sucker up and don't stop

[Larry]

Yeah, just think how it would affect housing prices, if there were, say, 1/4 fewer houses?

[twa]

I'm having trouble figuring out why it's in the bank's interest to get write off the value they loaned on a property, then spend money demolishing it, then take $0 for it.

Unless they're writing things off at fraudulently inflated values, or sticking the government with their "losses", or some such.

I'm sure there is a large write-off on the loss,the inflation is probably in the demolition and processing part....just business
ya get the write-off and out from under liability,while propping up house prices.

[PeterMP]

I'm having trouble figuring out why it's in the bank's interest to get write off the value they loaned on a property, then spend money demolishing it, then take $0 for it.

Unless they're writing things off at fraudulently inflated values, or sticking the government with their "losses", or some such.
They get out from under taxes and up keep laws/liability as well.

[Prosperity]

give me one of those houses... you know better
seems like a tremendous waste of resources

[Larry]

They get out from under taxes and up keep laws/liability as well.

OTOH, sell the house for 50 bucks, and you get out from under those laws, and you get 50 bucks.

[twa]

give me one of those houses... don't quote rule violations ya idjit
seems like a tremendous waste of resources

they are giving some away if ya move there

larry the write-offs are worth more than 50 bucks

here's ya a bargain
http://www.abovetopsecret.com/forum/thread664146/pg1
Mayor Dave Bing is trying to save Detroit by offering incentives to lure residents back to abandoned neighborhoods.
One program offers $150,000 in housing renovation money and requiring only $1,000 down to police officers who are willing to relocate to the city. Another offers college graduates $2,500 to rent and $20,000 forgivable loan to buy properties.
Potential home buyers can choose from plenty of cheap or free homes, especially in the blighted neighborhoods of Woodward Ave. and Brush Park.

[PeterMP]

OTOH, sell the house for 50 bucks, and you get out from under those laws, and you get 50 bucks.
And if nobody wants to buy it for $50?

They were selling places in Detroit for as little as $100.

http://boingboing.net/2009/03/17/artists-buying-cheap.html

The MEDIAN home in Detroit was selling for $7,000.

http://www.businessweek.com/the_thread/hotproperty/archives/2009/03/the_median_home.html

[China]

they are giving some away if ya move there


Mayor Dave Bing is trying to save Detroit by offering incentives to lure residents back to abandoned neighborhoods.
One program offers $150,000 in housing renovation money and requiring only $1,000 down to police officers who are willing to relocate to the city.

Apparently this program isn't going too well. Not one police officer has accepted the offer; apparently they think it is too dangerous:

Cop to LeDuff: Detroit is too Dangerous (http://www.myfoxdetroit.com/dpp/news/charlie_leduff/cop-to-leduff-detroit%27s-too-dangerous-20110728-dk)

But you might remember that Bing tried the same thing with another grand proclamation back in February. Known as Project 14, the city set aside $30 million in federal money to encourage police officers to move back to the city. The incentives are generous: $25,000 for a down payment, up to $150,000 on renovations and the possibility of loan forgiveness. Many of the city owned properties are in places like Boston Edison.

So how many cops have moved back to date?

Zero.

As one cop told me: “It’s too dangerous.”

If a cop feels that way, what does it tell you about the true state of the city?

Click on the link for the full story

[mardi gras skin]

why stop with bulldozing just a few houses in Detroit? Gas that sucker up and don't stop

That's what they should have done with massive chunks of New Orleans after Katrina. At least 1/3 of that city could have been given back to the swamp and no one would have missed it.

[Ellis]

This reminds me of a post I made a few years ago regarding Urban Prairie... where Detriot was destroying houses to save money by not servicing those areas any longer.

[Stillers6SB]

Apparently this program isn't going too well. Not one police officer has accepted the offer; apparently they think it is too dangerous:


Dangerous? Here's one of the houses:


http://cdn.cstatic.net/cache/gallery/5258/5453601996_6dc0148c98_o.jpg

More homes available here (http://curbed.com/archives/2011/02/17/stunning-photos-of-abandoned-homes-that-detroit-will-pay-you-to-buy.php#detroit-feb-10)

[mardi gras skin]

Isn't this Kensian economics at play? Bulldozing old homes to get rid of the glut in inventory so property values can start rising again...making it economically desirable to build new homes and expand the economy!

Dig a ditch and fill it back up.

---------- Post added August-2nd-2011 at 04:36 PM ----------


Dangerous? Here's one of the houses:

This one looks pretty nice:

http://cdn.cstatic.net/cache/gallery/5295/5453602054_c1a35de97d_o.jpg

[Larry]

Apparently this program isn't going too well. Not one police officer has accepted the offer; apparently they think it is too dangerous:

Cop to LeDuff: Detroit is too Dangerous (http://www.myfoxdetroit.com/dpp/news/charlie_leduff/cop-to-leduff-detroit%27s-too-dangerous-20110728-dk)

But you might remember that Bing tried the same thing with another grand proclamation back in February. Known as Project 14, the city set aside $30 million in federal money to encourage police officers to move back to the city. The incentives are generous: $25,000 for a down payment, up to $150,000 on renovations and the possibility of loan forgiveness. Many of the city owned properties are in places like Boston Edison.

So how many cops have moved back to date?

Zero.

As one cop told me: “It’s too dangerous.”

If a cop feels that way, what does it tell you about the true state of the city?

Click on the link for the full story

Detroit has a cancer. The cancer is crime.

[twa]

China they should have made a policy of living within the city limits for a percentage of new recruits long ago.
We provide houses in different neighborhoods for cops-resident cops

[Hubbs]

OTOH, sell the house for 50 bucks, and you get out from under those laws, and you get 50 bucks.

Banks can claim that the properties they donated were worth a lot more than what they know they'd actually get in a sale. The write-off becomes more valuable than selling at its true price.

[Yusuf06]

China they should have made a policy of living within the city limits for a percentage of new recruits long ago.
We provide houses in different neighborhoods for cops-resident cops
I'd bet money they've thought of that. The problem is that would only compound the problem, i.e. shrinking population AND a shrinking police workforce. After all, it's bad enough these poor schleps have to work in Detroit but making them live there too would have to qualify as cruel and inhuman punishment.

I've been to Anacostia, SW Atlanta, and other rough areas in Philthy, Balmer, Oakland and probably more. Detroit was the only place I was genuinely terrified...even in the "nice" parts of town like Grosse Pt where my former Mother-in-law lived. Parts of it look similar to the sets in The Terminator where they're fighting the machines. Seriously.

Never having to go back to Detroit again was but one of the benefits of divorcing the first Mrs. 06.

[twa]

It do help to institute it before before critical mass is reached.:)
Decay begins in earnest when you basically surrender areas of town.

[HailGreen28]

When even comic book characters get it right...
http://img.photobucket.com/albums/v255/blinkytreefrog/bop-74-07.jpg
http://img.photobucket.com/albums/v255/blinkytreefrog/bop-74-08.jpg

---------- Post added August-2nd-2011 at 09:33 PM ----------

About the police. How about Detroit's abandoned police stations?

http://www.youtube.com/watch?v=eGoC0PQsdcY