Five months ago, I wrote about my former neighbors "The Jonses" who lost their home in a foreclosure auction.
The bank that now owns the house just listed it for sale.
Since I have moved away from that area, I do not know how The Jonses left the house. Did they sneak away in the middle of the night? Did the sherriff's office have to force them out?
It is frustrating to think about how The Jonses desire to live above their means (and the mortgage lenders who allowed them to keep refinancing up, up and away) ended up costing so much to so many. For The Jonses themselves, I'm sure it cost them and continues to cost them an incredible amount of stress. (I wonder how their marriage is now?) The bank obviously lost. Their neighbors lost. But there were other losses as well that aren't so obvious: The county and city and all of the citizens who rely on the county and city services lost when The Jonses stopped paying their property taxes once it was clear they would lose the house. Our neighborhood home owner's association and all of the residents lost when The Jonses stopped paying their homeowners dues and the association had to use employee time to file a lien against their home. And no doubt the negative ripple effects spread even further than what I have thought of.
But you know what? In spite of the doom and gloom tone of this entry so far, I actually feel some hope. The reason is the price that the bank listed the house for. I know roughly how much was owed on the house, and I know that the bank is taking a pretty substantial hit selling at the price they have listed for. It's a semi-competitive price, the bank is going to lose money, and someone is going to get a pretty good deal on the house, especially if they can get the price knocked down a bit more. [The list price is about mid-point between what was owed and the lowball offer that DH & I threw out on the house months ago.] This gives me hope because it shows me that at least in this one particular case the bank has decided to "wake up and smell the coffee." They are not trying to maintain an over-inflated asset on their balance sheet. Looks like they are willing to cut their losses and move on. Yes, it sucks for anyone in The Jonses neighborhood who is also trying to sell their house right now and has to compete against that house. But in the long run, mightn't it mean that we are ever so slowly starting to work our way out of the housing market mess?