LETTER TO THE EDITOR / Question of the day:

 
Why is the government, local and higher, allowing banks to scam citizenry?

 
My latest experience with banks is via the site Hubzu.com that attempts to auction off foreclosed properties online.

 
The property I chose to bid on is located at  17243 Snapper Lane, Sugarloaf, FL 33042.  This is a property that has recently been vacated by its owner and is in considerable disrepair.  Hubzu attempted  to sell the property even while the owner was still living there and at a lower price but did not succeed.  Given no pictures were available nor was anyone allowed to step foot on the property, it was difficult to ascertain as to whether the property was worth the investment.  To make matters worse, the Hubzu site indicated that a bidder is buying it in an as-is condition.

 
Now that the owner is gone and pictures are available, the initial bid amount was jacked up by the bank and the internet site.  The previous iteration on the futile bidding process gave a buy it now price of about $425k and a starting bid amount of $331k. To be fair, a similar property in tip top condition would only bring in the initial bid amount.   Since no bidder reached the bank’s reserve price, the initial bid amount was lowered but the reserve was jacked up to over $440k.
The latest ‘auction’ brought a top bid of $342k and the bank was quick to offer a buy it now option at $440k since the auction did not bring its ‘undisclosed’ reserve amount.  The bank is not accepting offers and would only entertain cash or conventional mortgage applications.  Obviously, a VA loan would require a thorough inspection, something the bank seems to avoid.
It is during the actual bidding process, however, that potential buyers are spooked with what seems to be shadow bidding in an automatic mode.  The inevitable conclusion is that bidders appear to be nursed up a notch by insider bidding.  An indicator that reinforces that notion is the fact that the shadow bidding seems to stop whenever legitimate bidder(s) back off.

 
If my suspicions are correct, this type of trading is suspect if not outright illegal.  While banks are entitled to protect their investment, the process needs to be legitimate and also correspond to property condition as well as current value.  Nobody wants to buy a pig in a poke and be stuck with a bill of goods.  So far, the bank didn’t find its patsy but it keeps on trying…

 
Given banks and their affiliates are not investing in the properties in an effort to make them habitable before their attempts to sell them,  derelict properties of this type should be seized by local authorities and sold at a legitimate auctions, with reserve prices, if any, disclosed upfront.

 

Paul Sofranac

 

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