It's New York City's own version of a mortgage bailout - a massive auction today at the Javits Center where banks hope to unload scores of foreclosed homes, some for 60 percent discounts or more.You wont get the homes for $500, but you will get homes anywhere from 30-60% off the values when the homes were foreclosed.
The bidding for one five-bedroom, $550,000 Queens home starts at a mere $69,000.
More than 4,000 bargain hunters are expected to attend the largest foreclosure auction ever in the city, capitalizing on the misfortunes of more than 375 homeowners who lost their properties to lenders - including federally bailed-out banks.
The fire sale begins at 8 a.m., with the properties - located in the city, suburban counties, New Jersey and Pennsylvania - starting as low as $500.
That means that for qualified buyers, you're likely to find a $700,000 home for $490,000. It's not cheap, but could be a great value in the New York metro region where such prices only a few years ago could buy you a dilapidated Cape Code needing a full rehabilitation. They are expecting to find that $300,000 homes sell for $100,000.
Not all of these homes are in great shape either. Some are in need of significant repair. That may be due to neglect or because the borrower entering foreclosure decided to destroy the value even further by damaging interiors or ripping out plumbing, kitchens, or other assorted nastiness.
Still, if you are looking for a value, this might be a good time to check it out.
Of course, there are those economic nitwits who don't understand basic economics or real estate, like Rep. Carolyn Maloney who's busy criticizing the foreclosure auction because some of the banks selling the properties received TARP funds.
The purpose of TARP was to get the banks back on their feet. They have to shed underperforming assets and clear their rolls of properties that aren't actually making them money (that would be the toxic paper that can't be valued). That's what businesses do. It is also good for qualified buyers who can buy a home that is more appropriately valued than the overinflated prices that were being seen. Banks don't want to own real estate and would much rather someone else - a borrower - own the home and pay them through a mortgage. Maloney thinks that those people in foreclosure should be able to stay in their homes - even though they are completely incapable of repaying their obligations on their homes.
So, while Maloney sheds tears for those whose homes are being foreclosed, she's doing her part to keep many more Americans from having the American dream by standing in the way of affordable housing - courtesy of the same foreclosure process and more realistic valuation of properties.
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