Bank Bailouts and Foreclosures - What Happens To The Money And/Or Houses?

@CatsandDogs (13964)
United States
December 23, 2008 9:41pm CST
I have a question in the midst of all this bailing out going on. Since the banks are being bailed out the money that they lost from unpaid mortgages, what happens to these houses that have been foreclosed on? Do the original owners get a second chance at a better interest rate? Are these homes sold and the proceeds go back to the government as a pay back? Are these houses going to sit until they rot? Or are the banks making even more money once the houses are sold - again? What happens to the money and/or houses after the banks were bailed out by the government? Does anybody know?
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4 responses
@MsTickle (24756)
• Australia
25 Dec 08
I think they go to auction and the original owner still has to pay any shortfall.
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@CatsandDogs (13964)
• United States
26 Dec 08
Yeah..... that makes sense for I have wondered about that too. I would so love to know the details of the agreement between the banks and the government. It has to be interesting at the very least. Don't you agree?
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@MsTickle (24756)
• Australia
27 Dec 08
Yes, it is very interesting.
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@stiener (736)
• Singapore
25 Dec 08
When home owners do not pay the banks or financial institutions on their monthly installments, the banks or financial institution have the right to claim the ownership of the property in the case of a default. The bank can choose to aution off the properties or rent it out before a new owner is willing to buy the property. When you have so many houses left vacant, it generate no revenue or interest. If a bank meets with a cash flow problem, they may go bankrupt. If the bank has many investments or properties that may mean more retretchments after the closure. In this case, the government may offer a bailout policy (loan) to the bank to reduce the damage. However the control of the business or assets may be held by the government before the "loan" is being repaid.
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@CatsandDogs (13964)
• United States
25 Dec 08
It sounds like you know what you're talking about! lol Thanks for responding! So it IS a loan, not just money given to them on a grant to help the economy? They DO have to pay it back? Very interesting....
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@stiener (736)
• Singapore
26 Dec 08
Well...of course the government can offer the bailout with no strings attached and no conditions asked which will fulfill the requirement of "Free Money". But just to help you understand further. Think about 3 consequence that is associated with giving away the "Free Money". One each to the commercial (Business), Cabinate & Legislation (Government) and people (Citizens). I believe if someone would be interested to learn, having them to run some ideas about the topic or subject will facilitate learning better. Cheers and Happy MyLotting...
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@bunnybon7 (29724)
• Holiday, Florida
25 Dec 08
well i'll bet they dont go back to the poor people that lost them. thats just not what our government or the banks do. as my mom used to say, here the rich get richer and the poor get poorer.
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@CatsandDogs (13964)
• United States
25 Dec 08
Your mom is a wise woman! She's right, the rich do get richer and the poor do get poorer. Maybe our new president can do something about it and I hope and pray that he does. Spreading the wealth is a good thing.... at least in those words it is. We'll have to wait and see what exactly he has in mind first.
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@spalladino (17927)
• United States
24 Dec 08
Because there was no oversight included in the bailout the banks can more or less do whatever they like. I read that some lenders are working with those in danger of foreclosure but many are not so they're still taking the houses. The houses are then offered for sale at auction...at a very reduced rate. If they don't sell, yes, they sit and rot. We have a problem down here in Florida with the number of vacant homes with yards that are not being maintained. This creates not only an eyesore but a hazard since there are snakes down here who like to hide in tall grass.
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@CatsandDogs (13964)
• United States
24 Dec 08
Wow! So the banks can more or less double their money? Because they get the money from the government AND money from the sales from these homes? Gee, that doesn't seem hardly fair to the home owners or anyone else for that matter. Why should we, meaning any of us including the government make these banks even richer? But then again, we're talking about the government here, do they ever dot all their i's and cross all their t's? lol
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