One example will make it clear.
This home sold for $506 657 on 24th of July 2006. (county assessor's website)
30 months later that home is on the market for $174 900. The bank who holds the mortgage has a loss (best case scenario, buyer pays full list price) of $340 000 ($330 000 + $10 000 costs to sell)
That is the loss on only 1 home, there were 2.8 million foreclosures in 2008, they are expected to reach 5 million in 2009.
US Buzzword for 2009: LOAN MODIFICATION
Time to get the term "zombie banks" (see Japan 1980-now) back into the mainstream.
Friday, January 16, 2009
ALL US banks will go bankrupt
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