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Demolishing brand new houses!!
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Originally posted by Judge View PostWhat is the point of demolishing houses exactly? How does this help the bank?
A Texas bank is about done demolishing 16 new and partially built houses acquired in Southern California through foreclosure, figuring it was better to knock them down than to try selling them in the depressed housing market.
Guaranty Bank of Austin is wrecking the structures to provide a "safe environment" for neighbors of the abandoned housing tract in Victorville, a high-desert city about 85 miles northeast of Los Angeles, a bank spokesman said.
Victorville city officials said the bank told them the cost of finishing the development would exceed what they could sell the homes for.
The bank also faced escalating city fines as vandals and squatters took over the sprawling housing project, leaving behind graffiti and drug paraphernalia, city officials said.
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From: http://www.youtube.com/watch?v=nzACsGrumEU
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Obviously not ceejay which is why they demolished them.
Perhaps they could have rented them or sold them for land value.... demolishing is pretty hardish.
I saw an article where some homes were being bought for $1 I think so that they would be inhabited.
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there was an article in the paper on Friday morning, I think. It mentioned that the houses weren't finished and the value had dropped so much in the area that the bank didn't want to finish them (throw good money after bad). They were being vandlised and the owner (bank) was being fined by the city - per day. They pulled out and sold anything recoverable (sold for a song) and demolished the rest.
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what amazes me is that someone doesn't buy the houses for the land cost (after all that is all the bank is now left with) - or maybe even alittle less given that the bank spent money removing the house. But I suppose, even after finishing the house, you end up with a house you can't sell or rent. Seems like the ideal situation for someone with deep pockets to make A LOT of money in the long term (maybe 10-15yrs).
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oh wow that is HUGE rates costs, and explains much more clearly why people and banks are walking away from these properties. In NZ, it would make sense for the bank to allow owners to stay on, inhabit the house and even if you just paid the RATES and insurance, the bank's equity is at least safe.two ears and just one mouth.. for good reason.
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