(Read More: Housing Recovery Leaves Some Behind)

“I don’t buy it,” said Mark Hanson, a California-based housing analyst. “Yes, the investor will give them a chance to bid on it, but in this market Wall Street will put the houses on the MLS in hopes of a bidding war.”

Home prices are already moving higher across the nation, largely due to a severe lack of for-sale supply. Miller is unconcerned about the swift price increases and points to a mortgage credit thaw as a counter-balance.

(Read More: Home Buyers Are Back, but Where Are the Houses?)

The big banks say it is not so much a thaw on their side as improving consumer balance sheets.

“Credit standards haven’t changed in terms of solid fundamentals around income and documentation,” said Kevin Watters, CEO of mortgage banking at JPMorgan Chase. “What has changed a little bit: Consumers’ balance sheets have improved, so their debt is down.”

Article source: http://www.cnbc.com/id/100558148

“Does the bank rep think people are sophisticated enough to know the difference? They get a notice from a bank … this is complicated stuff. They don’t know if the sheriff will be out in 30 days. In some cases they probably stopped opening the letters from the bank. Some homeowners have fatigue,” Jacob noted.

Other homeowners, however, have just walked away voluntarily. They don’t expect to see any value in the home any time in the foreseeable future, and they’re not interested in negotiating with banks for a mortgage modification. Banks are unable to find them to notify them that the lien has been released, and now cities and municipalities are left holding the bag. Eventually the homes end up in a tax foreclosure, but will likely sit empty for years.

“It’s a challenge for the cities now because if they want to redevelop that property, who do they go after?” Jacob said. (Read More: Housing Recovers, but the Repo Man Is Back.)

Again, this problem is most prevalent in the nation’s hardest hit neighborhoods, where home values are very low and where some properties are uninhabitable.

If a bank sees any real value in a house, they will take it to foreclosure and likely sell it to an investor. What is still unclear is timelines. How long will it take for a bank to make a decision on a potential foreclosure? While some homeowners may refuse to leave until they get an eviction notice, more will walk away if they think foreclosure is inevitable.

A homeowner who leaves the house unwillingly before an eviction notice is “unusual” according to a bank source, but it can and does happen. Whether out of confusion or expectation, the person picks up and moves, never knowing that the possibility exists that the bank will walk away and leave them owning the home free and clear. (Read More: Already Time to Throw Up Caution Signs on Housing?)

The consequences could end up costing the homeowner thousands in taxes, maintenance and utilities and leaving them open to wage garnishment and legal liability. In other words, until the sheriff kicks you out, it’s probably best to stay put.

Article source: http://www.cnbc.com/id/100377676

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