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More On What Is Happening Over The Pond

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Found this on Bloomberg. Banks don't even bother to maintain the properties they own, leaving it to the taxpayers to foot the maintenance bills.

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Morgan Stanley's three-bedroom condominium on Boston's Hendry Street, an area known as Meeting House Hill for a nearby church founded by Puritans in 1631, is on the market for $54,900. The unit sold for $299,000 two years ago, according to the deed.

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Morgan Stanley said it bought the loan in April 2006 to package and resell it in a security. That didn't happen because the homeowner defaulted on the first payment.

:o

Banks or mortgage companies typically hire people to care for repossessed properties. As foreclosures increase and the value of property drops, more companies are simply walking away, Zandi said.

I was wondering if there would be any money in this sort of thing. If the place doesn't sell then the bank has to keep up ground rent payments, make sure it's not being squatted in, etc. Could be a good career move for a property lawyer.

Mortgage companies walking away is new to me.

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Expect to see more of it in this era of US subprime. A lot of subprime has been in very poor areas of the US where, frankly, most would not want to live. If subprime borrowers default and forced to leave those properties who is going to want them? They plunge in value but even then no one wants them as the various US tax regimes will often mean it is prohibitive to do anything with them. I suspect we will see entire suburbs in the US become ghost ghettos in the coming years.

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The thing is the place they are talking about isn't that bad. When you look at the inside of similar flats in the same area it's even pretty good, I would mind living in them.

http://www.redfin.com/stingray/do/printabl...ting-id=1478418

I researched it a bit and what I think happened is the area was a good family area but all the houses were recently bought by

a number of property developers, to be turned into flats. This phenomenon combined with the price crash has turned the neighbourhood into a dead zone.

What I wonder is whether these kind of price reductions (300 -> 54 e.g. 82%) could happen here too. There are a lot of properties in the UK that should really fall by that much or more IMO (such as those inner city flats that even HA's don't want to touch).

Could people in the US be more pragmatic than they are here, more prone to accept their losses and take radical steps to cut them early? Or should we expect the same to happen here?

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Could people in the US be more pragmatic than they are here, more prone to accept their losses and take radical steps to cut them early? Or should we expect the same to happen here?

As I understand it, one big difference is that in many cases, mortgagees in America have no personal liability; the mortgage is tied solely to the house, so the owners can just hand over the keys and walk away without being chased for years afterwards for the shortfall in value.

If you'd taken out a $300k mortgage for a flat that was now worth $50k, would you keep paying or just walk out and let the bank take the hit? I can't see anyone in their right mind paying six times what the place is worth, plus interest, when they don't have to; their credit rating may take a hit, but so what?

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Theres stuff on one of the "great crash 1" threads about ghost streets from the mid 90s. Derelict vacant homes no-one wants, even at auction, I suspect it will happen on a much larger scale this time, as the banks will be under so much stress.

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Guest grumpy-old-man
Theres stuff on one of the "great crash 1" threads about ghost streets from the mid 90s. Derelict vacant homes no-one wants, even at auction, I suspect it will happen on a much larger scale this time, as the banks will be under so much stress.

yep, we discussed this in 2006 iirc & no-one believed that houses were selling for £1 in Teesside in 1995/6.

ok, these were council houses on really rough estates....but for £1. These houses are now currently being sold for £100k. :o:lol::lol:

how much after the crash.....???

and another.....

these are the same areas (ok they might be the slightly better part by half a mile or so) that were selling for £1 last time around......

:ph34r:

Edited by grumpy-old-man

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The flat I was born in on Hampsted Road in Newcastle was sold in 1997/8 for 50p.

Here is a Newcastle Journal report from Jan 8, 2007 which showed owners who had bought 2 of them and knocked them into one selling them for £145,000.

The thing is, Benwell is still a shitehole. :blink:

EDIT 1: Terrible grammar for an English Language and Lingustics graduate.

EDIT 2: Wrong date given on link

Edited by Pacific State

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Guest grumpy-old-man
The flat I was born in on Hampsted Road in Newcastle was sold in 1997/8 for 50p.

Here is a Newcastle Journal report from March 8, 2008 which showed owners who had bought 2 of them and knocked them into one selling them for £145,000.

The thing is, Benwell is still a shitehole. :blink:

EDIT: Terrible grammar for an English Language and Lingustics graduate. :wub:

it is....

I have driven through there a few times when I used to work in Newcastle.

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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