I've banged out quite a few quick posts in the last 36 hours - in case you missed them:
- I've Got a Bad Feeling About This: Lamenting about Chinese generic herbicides
-ZipCars IPO good feedback from commenters on both sides of this one
- The Foreclosure Freeroll. I got a lot of intelligent feedback on this one on the SeekingAlpha version of my post - which inspired a barrage of comments - unusual for an article not about Goldman Sachs, gold, or HFT. I especially liked BennyProfane's summary of the situation in my comment thread there:
"It's actually pretty simple. These people are house sitting for the banks, who have no desire and are not capable of dealing with the inventory that would flood the market if foreclosures occurred at a normal rate. Just think of the cost to the banks to maintain and pay the taxes of all of these homes for the five to ten years they will be vacant."
Now a question for readers who may know: The people in the NY Times article I referenced who stop paying their mortgages only to have the banks NOT foreclose on them - they obviously still owe property taxes. Is it commonly expected that people continue to pay their property taxes (assuming they can afford to, even though they are strategically defaulting on their mortgages) - and do the municipalities take any sort of action on delinquent property tax payments, like accelerating eviction? Or do they just attach liens to the property? Basically, what I'm getting at is that I would expect that there are more consequences (with respect to RECOURSE) for not paying property taxes than there are for not paying mortgages. Here's a good answer from commenter "Conventional Wisdumb" on my Seeking Alpha thread:
"In FL, Back taxes are senior liens against the property which means they get paid before anyone else gets a dime including the mortgagee. Generally when a back tax is unpaid the county sells the liability as a "tax certificate" to private investors. This allows the county to continue to get paid the taxes they are owed while creating a new senior lien against the property.
The "tax certificate" is auctioned at a publicly advertised location for bidders. The rate of return starts at 18% and is bid down to the lowest rate to clear the certificate. The property owner is on the hook to pay this interest cost plus the principal to the owner of the certificate - if the bank owns it they must pay it. If the property owner does not redeem the certificate within 2 years from the date of sale of the certificate, the holder can apply for a tax deed and force a public auction sale of the property - the county can be the owner of the certificate if there is no private investor. The holder of the certificate at minimum will get title to the property if the proceeds of the sale are less than the amount owed.
They seem to be an interesting investment vehicle for people that understand them. Bottom-line is that taxes always get paid first."
-Shadow Inventory : three more failed projects
and two low content posts: