Monday, January 2, 2012

Keith Gilabert on BofA Foreclosure Rentals

Keith Gilabert for BentleyForbes Analytics - Bank of America has stated they may rent back foreclosures to former owners.  I think this is a terrible move by BofA because if the owner couldn't make the mortgage payment, what makes you think this person will make rent payments.  Keep in mind, to get foreclosed on this borrower has to default by not making a single payment in 9 months.

In my humble opinion, if a person cannot make mortgage payment in 9 months what makes you think they can make a rent payment??

I think the appropriate move for BofA would be to stop floating bad loans and purge their mortgage portfolios of all the non-performing assets and start with a clean slate.

The banks have been holding this ghost inventory of homes hoping the housing market improves but it hasn't and it won't.   The US economy has not created any jobs or industry in the last 4 years.  There is no catalyst for wealth so were is the consumer going to find the money to buy a home? The housing market has dropped 10% in 2011 on average and will drop another 10% in 2012.  I think the housing market may stop falling by the end of 2013.  I am in no rush to buy and with patience of capital you can find a good deal out there if you're thinking of buying a home.

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