AfterShow

Meet your new city council vis a vis your HOA, vis a vis your Bank

Common wisdom was once upon a time that the bank did not ever want to own your home. It would try so hard to not own your home it would fall over backwards to work with you if you ever fell behind on your mortgage.

Until the housing bubble burst in 2007-08.

Everything has now changed. Banks want so badly to own your home that they will literally dodge your phone calls and letters attempting to restructure your loan or even work out terms with you.

Being rather old school, this sort of behavior puzzled me at first. What would a bank do with a house? They are not in the real estate business?

But they are. Getting into the real estate business is their way of turning lemons into lemonade.

When the foreclosure rate was insanely low, the cost to the bank to manage a house that was foreclosed on was too great for the return. But look what has happened since the bubble burst. The foreclosed homes have consolidated. Where there was only one home in a subdivision, there are now 20-40 homes or more. It now makes sense to hire property management companies to flip the house, maintain it and manage the renters.

The banks are slowly owning large tracts of private property. They are becoming the de facto Home Owners Association. Eventually, they will be the loudest voice at city council meetings and zoning boards.

Like the McDonalds or Walmart real estate plan. Only they own where you live and raise your family.

Are you noticing? Is anyone in Washington?

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