If the bank owns the property after receiving mortgage payments, how does that put them into a losing situation. How many foreclosures occurred this year? How have housing starts afected the collapse of so many banks?
Banks lose in foreclosures first of all because they usually try to sell the homes as soon as possible. They are in the business of loaning money, not holding real estate so they try to get rid of the homes. Also, many people who lose their homes to foreclosure owe more on the home than it is worth in the current market. This goes back to the first reason that banks don’t want to hold onto the home until the market turns around enough for them to make money over the amount that was owed.
New home starts haven’t affected the bank problems. It has been the other way around. Since people cannot afford to get loans right now, the new home builders are having problems getting rid of the homes that they have already built so they are slowing down production of new ones.