A transfer of wealth
A press release announcing an auction of historic size and significance triggered a big-picture epiphany, the kind of instance the drunks call a “moment of clarity.”
Millions of dollars of North Carolina property, much of it in waterfront subdivisions, will be auctioned off in Wilkes County on Dec. 17 for bargain-bsaement prices to anyone who’s got the cash or the juice to leverage a loan.
While many people undoubtedly see this as a fabulous real estate investment opportunity, we see it as both an allegory upon the times in which we live and a harbinger of the “new normal” yet to come.
Homes get foreclosed on, of course, when the loan payments can no longer be met, and it’s been happening with some regularity to people living on the financial edge since before the days of Tom Joad.
But what we’re seeing in North Carolina — and, indeed, everywhere else in the country — is a massive reclamation of property by the banks, so widespread that even those who qualified for seven-figure mortgages are not immune to the indignities of reposession.
This steady stream of foreclosed-upon properties, which has been flowing heavily for almost three years, has as its source a confluence of ill-advised loans and rampant unemployment. Not an insignificant number of these homes have been abandoned after their values adjusted to well below what their loans were worth.
So what we have now is a slew of empty homes, not much good to anyone except the people evicted from them yet firmly in the custody of large banks, who suddenly find themselves embroiled the real estate business to such a large degree that they are forced to hold fire sales like the one in Wilkes County next week, writing down the value of their holdings significantly.
It occurs to us that the values of some of these homes could have been written down before foreclosure, allowing some homeowners the chance to re-buy their homes at essentially the same price the bank would sell it to a stranger at auction — but no, there is no room for such decency and common sense in banking.
A more conspiracy-minded bunch might see traces of a grand plan here: a huge transfer of wealth from our nation’´s homeowners into the hands of… the banks, which now collectively own enough property to qualify for statehood. After a brief holding period, all of this property becomes available below market value to anyone who still has any money — or the ability to borrow it.
But we’´re of the mind that the architects of this fiasco were driven by short-term greed rather than long-term planning. What we’´re living through now is what happens when the smoke clears.
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