Update from the Foreclosure-Based Economy 0
Guvmint steps in to keep supply of foreclosures high:
While the volume of new foreclosures in Hampton Roads has been easing during the past year, the inventory of homes owned by HUD has been growing. By March, the number of homes owned by the government housing agency nationwide had climbed to 68,997, up 51 percent from the previous year, HUD reported.
Snark aside, what’s happening it that, after a lender forecloses on a home with an FHA mortgage, the government ends up stuck with the property. The lender has already scarfed up the profits from the fees at the time of the sale (and the fees at the time of the sale, not the investment in the loan, were the incentive for granting those iffy mortgages*), and the government is left holding the bag.
An “investor” can get one of these houses for about the price of a one-year-old Toyota.
This is called, I think, “flopping this house.”
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*Remember, borrowers weren’t knocking down the doors of lenders to get loans. Lenders were knocking down the doors of individuals to sign them up for loans; if you could breathe, they would sign you up. Remember all the junk mail you used to get from Ameriquest and CountryWide looking for more marks in their games of three card monte?
