Mostly that's because if they hold on they can still pretend it's still worth $250,000. If they sell, they'll have to admit it's only worth $150,000 and take the loss.
Uncle Billy lost the $8,000 and will need another bailout soon.
Most of the banks that I am talking to are holding onto their foreclosed properties...not selling them...not financing them...nothing.
Mostly that's because if they hold on they can still pretend it's still worth $250,000. If they sell, they'll have to admit it's only worth $150,000 and take the loss.
Uncle Billy lost the $8,000 and will need another bailout soon.
I read the reason they are doing that is it would totally crash the housing market it they put them all on the market at one time, so as they sell some off they put some more out there.
That is most likely because of mark to market that way they do not have to show the crap on their books and if they did show it many of them would be shut down.
And a lot that should have been foreclosed on, haven’t been. Simply living in them free, for now.
Banks are getting back more than they can handle.
Now “holding on to” often means, the houses are vacant, but the lender has not transfered title. This defers associated costs, insurance, HOA dues, and taxes are still the responsibility of the debtor.