Living After Foreclosure

If this story is true, this is an ugly development.  (It’s a guy with a video camera, so who knows.)  Banks are allegedly paying to destroy new and unfinished homes that they own rather than pay mounting fines imposed by local government for allowing the homes to stay vacant and poorly maintained.

The only people winning out are the people being paid to demolish the homes.  The banks are destroying the collateral for defaulted loans.  The local government, for its want of fines, now misses out on tax revenue.  A person who would have bought the home at the right price no longer can.

Banks and local governments are playing monetary chicken with vacant homes.  Banks must either maintain the homes acceptably — a cost they’ll likely never get back — or face fines.  Local governments turn up the heat and expend effort to get the banks to maintain the properties, or else they become run-down and desirability of surrounding properties goes down, squatters move in, etc.

In this town, the banks flinched.  But neither the banks nor the town will win here.

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