WORLD PROPERTY CHANNEL ®

I don't know about you, but after 50 years as a word-crafting cobbler in this news-writing business, I still question much of the printed word.

Some of the erroneous information is passed along by sources with their own personal agenda, of course. Like politicians and government representatives, for example.  Some of it also gets published through an author's sloppy or incomplete research. And some of it comes from a reporter or editor simply not triple-checking the information.

However, when I hear questionable comments coming from sources who claim to have been a direct party to a deal, my ears perk up.  Like my German Shepherd, RoyBoy, after being told by my Red Chow, Chester, that a white-tailed rabbit is hiding in a far corner of the yard.

So when I clicked on the Idiot Box the other day and heard a prominent national consumer talk show host interview prospective home buyers about their recent experiences in California, I was all ears.

The home buyer said he was considering  bidding on a bank-owned condo, once priced at $250,000 and now listed for $99,000.  Even at that fire-sale price, there were no bidders, the home buyer said.

So he submitted a bid of $71,000.

There was no immediate response from the bank. But after a few weeks, the bank - already loaded with hundreds of foreclosed-on condos - offered to sell the property for $138,000.

The home buyer was flabbergasted.  Here was a bank with a drawer full of foreclosed properties and was trying to negotiate a higher selling price - to the one buyer who was interested in taking it off the bank's books.

The home buyer walked from that deal, still shaking his head in amazement at the bank's selling strategy in this frenzied foreclosure market, he told the TV host.

Another home buyer said his local bank had told him about one million condos and single-family homes will be foreclosed on in the next 12 months across the U.S. - but that many banks will hesitate in taking immediate title to the properties.

Instead, the banks plan to allow the homeowner to remain in the house. That way, the homeowner might cut the grass, clean the yard and generally keep the property well maintained, outside and inside, for an undetermined period.

Utilizing that strategy, the bank will not be forced to pay condo association fees, property taxes or write checks for other expenses related to the property. 

The banks are using this strategy, the TV host states, because municipal building departments, more and more, are going after lenders who acquire properties through foreclosures and then forget or refuse to maintain them, resulting in a blight on the community.

After listening to the home buyers, I had no reason to suspect they were exaggerating in the least.  After all, they were eager to close a deal on a property but were being buffaloed by obviously greedy, uninformed and insensitive bank representatives.

The home buyers didn't disclose the names of the banks they were dealing with. But those banks, in my opinion, are sure to fall in the Failing Class in the near future. 

So far this year, the Federal Deposit Insurance Corp. has closed and then re-opened 39 banks. The banks immediately re-opened under new ownership.  Depositors didn't lose a dime, according to the Federal Deposit Insurance Corp. 

I'm betting the California lenders involved in the  TV host's home-buying interview segment will be among the banks shut down by the FDIC before the year is out.

If they aren't, they should be. 

And that's the way I see it - for now.

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