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Does the government give subsidies to banks for owning foreclosed on homes?
There is a house down the street from me that was foreclosed on several years ago. It sits empty, and doesn't appear to even be for sale. There's no for sale sign out front. A friend proposed that the reason the bank doesn't make an effort to sell it, and is willing to pay the property taxes year after year is because it is receiving a government subsidy. Is that true? I tried searching this issue and found nothing.
The basic question is, are there federal or state government programs that give financial subsidies to banks that own foreclosed homes. If so, please provide a link where I can read about the program.
I'm libertarian on this issue so would be opposed to any such programs if they do in fact exist.
2 Answers
- Simpson G.Lv 77 years agoFavorite Answer
I have not heard that. They can write off the amount they lost on the deal, property taxes, and cost to maintain the property on their taxes.
Usually if a house is just sitting, there is a legal problem occurring someplace and this is tying up the property. Or, the bank thinks that market in that area is going to turn around and they will make more by sitting on it for a year.