A random idea for the housing market

[Taco John]

Originally Posted by Saul Good

I don't follow. These would be bank-owned houses. This would force the banks to either clean up these messes in a timely manner or have it done for them with a charge associated.

Who owns the property? The banks or the government? If the government says "sell these, or we will sell them for you," then the government is saying that they own the property - the banks are just leasing it from them.

Why would anyone buy a home from a bank if they knew the government would undercut their price in a pennies on the dollar auction? Why would anybody buy the guy's house on Maple Street for market value if they knew they could get a similar home on 117th at a fraction of the price?

[Saul Good]

Originally Posted by Taco John

Who owns the property? The banks or the government? If the government says "sell these, or we will sell them for you," then the government is saying that they own the property - the banks are just leasing it from them.

Why would anyone buy a home from a bank if they knew the government would undercut their price in a pennies on the dollar auction? Why would anybody buy the guy's house on Maple Street for market value if they knew they could get a similar home on 117th at a fraction of the price?

There are some flaws in your reasoning here.

1. Houses are auctioned regularly. It doesn't crush neighboring home prices, and they don't go for pennies on the dollar.

2. The banks would get the proceeds, so its not like the government would act as owners. If they can force people to pay property taxes, they can force a sale.

Here's a question, though. Are banks required to pay the taxes after foreclosing?