Banks driving up prices of repossessed properties

HAMISH_MCTAVISH

Property buyers are finding themselves being unwittingly “gazumped” at the last minute when trying to buy repossessed homes from large UK banks.

Gazumping of repossessed houses and flats has grown in recent months as banks aggressively market their properties – even after they have accepted offers.

While large banks typically follow this strategy for sales of repossessed homes, state-supported banks are under pressure to get the best price for the taxpayer.

Liz Peace, chief executive of the British Property Federation, said she experienced a stressful three-week purchase of a repossessed property from Mortgage Express, a division of the now state-owned Bradford & Bingley. The bank continued to market the property even when the exchange had to be delayed by its own failure to produce the correct title deeds.

“I don’t think it’s a moral way to do business,” said Ms Peace.

The trend follows a change in the way banks sell the majority of repossessed homes. In 2008, government-backed banks such as Northern Rock came under fire when selling foreclosed homes through big auction houses. Defaulting borrowers often felt the lender had not maximised the sale of properties. To avoid such accusations banks are increasingly selling through estate agents.

Martyn Alderton, operations director for LSL Corporate Clients, an asset manager that sells repossessed properties on behalf of lenders, said that while gazumping did happen, it should only do so with the full understanding of the buyer and vendor.

“Under the whole ethos of treating customers fairly, the job for asset managers and for lenders is to get the best possible price for the defaulting borrower,” said Mr Alderton.

http://www.ft.com/cms/s/0/057b6080-4126-11e0-bf62-00144feabdc0.html#ixzz1F5Sk0yCS

Perfectly right to do so.

Banks have a duty to minimise losses for themselves, the taxpayer, and the mortgagee, by maximising sales prices.

Good to see they're moving away from auctions and ensuring houses aren't sold at much of a discount, but instead through the normal EA sales channels.

geneer

Lordy. Sounds like repossesion is quite a big problem at the moment. Thanks for highlighting this Spamish.

[Deleted User]

Think I read somewhere that the banks were becoming landlords as well. I hope they get some seriously bad tenants.

nearlynew

What?

At the same time as banks are driving up the prices they are also rationing mortgages?


wicked.

HAMISH_MCTAVISH

[quote=[Deleted User];41549038]Think I read somewhere that the banks were becoming landlords as well.[/QUOTE]

Well they know full well the worst thing they could do for their balance sheets is dump a lot of properties on the market and drive down prices.

They've obviously learned their lesson from the 90's crash.

Anyone expecting repossessions to soar and the banks to dump stock cheap and drive down prices is living in la la land.

Nikel

nearlynew wrote: »

What?

At the same time as banks are driving up the prices they are also rationing mortgages?

Yeah they must be schizo

Niv

[quote=[Deleted User];41549038]Think I read somewhere that the banks were becoming landlords as well. I hope they get some seriously bad tenants.[/QUOTE]

When did you read that? 10years ago or longer? Banks have been landlords for years, there is nothing new about that.

Generali

HAMISH_MCTAVISH wrote: »

http://www.ft.com/cms/s/0/057b6080-4126-11e0-bf62-00144feabdc0.html#ixzz1F5Sk0yCS

Perfectly right to do so.

Banks have a duty to minimise losses for themselves, the taxpayer, and the mortgagee, by maximising sales prices.

Good to see they're moving away from auctions and ensuring houses aren't sold at much of a discount, but instead through the normal EA sales channels.

I looked at buying a repo'd place years ago (2001?) and this was how it was to be sold.

Mary_Hartnell

I bought a repo circa 1998 from Halifax via a Halifax estate agent;)
(Remember those days when all the new banks thought buying estate agents would be the way forward?)
I thought it was strange that the agent was not local to the village, so when I looked in the windows of the house and saw that the loo had been drained down, the penny dropped. (no jokes about fulling cloth intended).
The contract said in effect - "you have actually seen this place so you obviously now know more about it than we do so don't bother to ask any questions".

DervProf

HAMISH_MCTAVISH wrote: »

Banks have a duty to minimise losses for themselves, the taxpayer, and the mortgagee, by maximising sales prices.

Good to see they're moving away from auctions and ensuring houses aren't sold at much of a discount, but instead through the normal EA sales channels.

Bankers bonuses = bad.

Banks having to be bailed out by the taxpayer = bad.

In previous property crashes, I believe that banks generally did sell off most repo'd property at auction, but you seem to think that it's good that they are no longer doing that so much.

Banks being bailed out by the taxpayer, not allowing a few of those taxpayers to possibly buy repo'd property at a discount = good ?

Sounds like it's the banks who have a fair degree of control over property prices. But I thought it was a free market ?

geneer

HAMISH_MCTAVISH wrote: »

Well they know full well the worst thing they could do for their balance sheets is dump a lot of properties on the market and drive down prices.

Wow. If theres enough properties to drive down prices,
things must be quite serious in repo land.
Thanks again for highlighting spamish.