Shadow inventory consists of those homes that don’t have a final conclusion established.
They are either bank owned, those properties that have had notice of defaults filed on them or properties that are headed to auction.
Although some of the property types mentioned may seem to have a “final result” in store for them, it’s not that clear of a path.
Bank Owned – These are homes that are owned by the bank. Most banks are not in the business of owning homes. They don’t want to directly. They want to lend money for homes and have the owner, the person who qualified for the loan, continue to pay their mortgage down over 30 years.
They want that person to refinance from time to time and maybe even take money out to do updates, repairs or to pay off other bills.
Each of these acts makes the financial institution money and remember, Financial Institutions like to make money.
Some of the bank owned homes, those homes that went to foreclosure and where the bank is now responsible for their upkeep until they have a “final destination” established, are in a holding pattern.
One of the examples of the bank owned “holding pattern” is a home that went the way of foreclosure that is tenant occupied. A case in which those tenants have a real, signed, executed and “enforceable” lease agreement in place. This would be a lease agreement they had with the prior owner, which the bank is honoring. That type of “bank owned home” is considered shadow inventory and won’t be for sale for the term of the lease if at all.
We have literally Hundreds of Homes, condos and townhomes that are within the “shadow inventory” category in the Santa Clarita Valley Cities.
Contact with us when you are ready – my phone number 661.400.1720 is in the header of this REMAX of Santa Clarita Blog.