Wasted Homes and Brown Lawns

As a real estate broker it makes me uncomfortable to watch homes wasting away when a lender takes it back. When an owner can no longer make the payments and fails to get the lender to modify the loan terms (a common story lately) he gets the move-out notice and the bank takes over. But they don't do anything but shuffle paper . . . no painting, no mowing, no watering. The house begins a slow slide into disrepair.

Now the already-eroded value begins to sink even further because the brown lawn and the peeling paint take away from its curb appeal. Lenders evidently don't seem to understand this. They already have stopped receiving the monthly payment and tossed the owner out so now, with zero coming in you would think they would at least try to maintain what value is left.

But no, the banks continue down this imbicilic road of snatching property and letting it rot. It makes me furious that, for example, a lender would kick out a paying tenant when the owner quits making mortgage payment. Why, for heaven's sake would you kick out somebody who was paying rent to an owner? Wouldn't you, duh, maybe ask the tenant to start sending payments to the bank instead? Like, can't a bank be a landlord now and keep the place alive and breathing?

Remember, these lenders are the same ones we "lent" billions to because they were in trouble. I don't know where that money went but it never landed where it was needed and now it looks like we just bailed out some really, really dumb business people. And I don't think we'll get paid back, either.

Here's what the banks could do instead: can't make your payment this month? No problem, let's refigure your loan. We'd rather add months to the end and reduce the interest rate (longer term even at a lower rate could yield the same return for the bank so they wouldn't lose money on the deal) than take a loss on the house.

But oh no. Seeing at least to the ends of their noses these giants of industry want the quick fix. Get out of this deal at any cost. After all it's taxpayer money, not our's, right?

I'm hoping some reader was in this line of work and will set me straight but I wonder if I will hear from anyone.