fixBuffalo

905 Humboldt...going, going...

I first posted about this place last month. And in Monday's Buffalo News real estate transaction column I noticed that the property had formally transferred to HUD's hands. Returning from the morning bagel and coffee run, I noticed the Dick Kern had sent me this information about 905 Humboldt. There is a complete property report available to download.

Starting Price $14,000

Bids for this property close on 6/12/05...so hurry!

I e-mailed J-M Reed over at Polis Realty and he told me this short story about what happens with banks and HUD. I asked him what he thought 905 might fetch...

I would guess about 10k – 66k is the amount insured on the mortgage (equates to the judgment amount, essentially.) often this shows up as 10.00 if you see it recorded as such. The way it works is this: the property was mortgaged for say 70,000 with an fha backed (insured) loan. The lender forecloses on the property when the borrow is in default with a final judgment amount of 66k. The property is then deemed to be any amount less than that (often much less) so title is transferred to hud and hud pays the judgment amount of 66k (an insurance payoff). Hud now sells the property amount for their appraisal (say 10k). So what we end up with, is taxpayers paying the 56k. While this was designed to be a vehicle to increase home-ownership with the feds guaranteeing loans (which is the positive) we have ended up with a situation where banks will write the loan knowing they will get their money back no matter what. A flawed system which will result (as greenspan has indicated) must result in fewer federally insured loans.

J-M has keys to the place and would be very interested in helping
a serious buyer with the purchase of this totally cool property.
JM Reed can be reached at 716-881-1200
or jmreed@polisrealty.com

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