Why Are Banks Sitting on Foreclosed Houses? "Time to Slash Prices?"
Wall Street Examiner picks up on something Countrywide Foreclosure has been tracking for a while: it appears the big lenders are not rushing to sell the foreclosed houses they're getting stuck with. The chart at left shows the growing pile of foreclosed California houses owned by Countrywide.
At some point, the banks need to sell these houses -- they are not in the business of being landlords. But the evidence shows a growing pile of foreclosed houses, owned by banks and lenders.
Here's one theory: banks are in no hurry to recognize the losses they will take when they sell these properties for prices far below the amount of the underlying loan.
Here's another theory: moving this property takes time and manpower, and the banks and lenders wren't ready for this, and don't have the infrastructure in place yet. As Wall Street Examiner points out, "There seems to be a lot of unresolved issues with these properties."
Graphic Credit: Countrywide Foreclosure