Quote:
Originally Posted by Saul Good
Could we force the banks to sell the houses within a certain amount of time (one year or so, maybe) following the foreclosure? If they fail to do so, the local government is allowed to auction off the property, collect a fee, and give the rest to the banks.
This would generate revenue for the municipality, clean up the neighborhoods a bit, and help ease the housing glut (albeit by dropping home prices way down).
The banks would take a hit, but I'm not worried about banks that created a lot of this mess in the first place.
Thoughts?
|
Its fed regulation that prevents banks from selling or dumping distressed REO's on the market.
As far as housing is concerned it really isn't the banks that caused this mess.
It was the "salability standards" established by Fannie / Freddie that Barney Frank and Chris Dodd said not to question back in 2004 I believe.
They gave consumers the rope to hang themselves with.
Your idea could work, but you don't want local community banks shouldering this because they didn't create it. The current administration is trying to kill the local banker and back his dog in the hunt which is any institution that took TARP. Just like GM.