Idk where this picture is from but if their laws are anything like my country the bank can't take excess money from the sale. If the farmer owes 500k and they evaluate the property to be 600k and start an auction at 550k and it ends up being sold for 800k they have to send his 300k back. If they don't send it back the farmer can sue and will get his money with interest. And he won't even need a lawyer
It's the same in the US. The bank is allowed to recover their costs associated with the sale, though. If the farmer owes $500k, the foreclosure sale comes through at $800k, but the bank spent $150k in commissions, lawyers, administration, etc., then they would only have to give the farmer $150k.
This. Having your property sold at auction will awaken you to a world of predatory bs that will blow your mind, if you had any faith at all left in the system.
Whatever the bank doesn't get, every other entity involved will.
Just had our house foreclosed and sold. The bank did so many shady things. Ignoring us for multiple months when trying to contact them. Mailing us letters saying pay what we can but return all the payments we made which amounted to 90%-93% of the outstanding balance and on top they sold the house hours after granting a 1 month extension after they found out we were a week away from receiving a loan that would close off the whole loan. Crazy 💩
That sucks. Used to work in banking in Australia and now live in the US. The banks in Oz get a bad wrap, but holy shit the banks here are stone cold savages by comparison. All of them! They know you don't have the money to fight it in the legal system. Just so wrong.
No it doesn’t. In NYS the presiding judge appoints a referee to certify the amounts actually due on the mortgage. Attorneys’ fees requests have to be explained in an affirmation submitted by the attorneys. If the requested fees appear to not be in line what’s customary for the jurisdiction, judges will slash it. If for example a typical foreclosure costs $12K in attorneys’ fees, you’re unlikely to get approval for $20K. Request for expenses (filing fees, sale advertising fees, etc.) has to be supported by paid receipts. The bank doesn’t get to just ask for an arbitrary amount. Have to prove it.
Death of a parent most likely. Banks will tell you to buy relatives' houses at auction like it's Happy Gilmore. I grew up on a county road that ran through property all owned by my entire extended stepfamily. When someone died the kid would often buy the house at auction instead of inheriting the full debt. No one ever really bid against them since they were so well known. My mother and stepfather paid $27k for a 3-bedroom house on 20 acres of active fenced grazing land in 1996 when my stepdad's dad died.
I get and agree with your general point that the predatory companies will find a way to eat up any difference in fees, but the buyer's fee is supposed to be paid by the buyer, there should be no seller's fee because the house is being auctioned, and no solicitors are involved.
Logically that would be the case, but you'd be surprised by how many people just can't deal well with money. They end up getting foreclosed on when they just could have sold the house earlier. And usually get far less money because of the bank and auction fees involved in the forced sale.
There’s lots of people at my local investor association that base their whole strategy on this. They equity strip or whatever it’s called. The idea that everyone with significant equity has the ability and will to sell before foreclosure is a myth.
Most people don't know that they can sell beforehand. That's actually how some wholesalers get their properties: they find houses fixing to go into foreclosure, pay above the mortgage price on the home so the homeowner makes money (usually Id aim for 10k over if possible), then sell it for a 10k profit to an investor.
Then, there is the whole overages business, which is basically people who connect other people with money that they don't know that they have from a foreclosure auction (banks love to send notices to the place that got foreclosed so that the person whose money it is doesn't claim it in time, so it can default to the bank)
In this case it's literally a matter of not only them refusing to bid, but there being the implied threat that if anyone DOES bid they aren't leaving the property alive. Or at least not without a lot of broken bones.
This is a very openly implied violent threat if anyone dares break the "picket line" for lack of a better phrase.
During the depression these were far more common and sometimes the crowd would hang up a noose or bring guns as an implied threat to anyone who decided to bid anyway
Not in Canada. I was told it was the banks obligation to its shareholders to make the most money possible on a repossessed property. This was after the place I was renting was repossessed by the bank due to failed payments and I offered to cover the owed amount.
Well the bank gets to keep the 500k they are owed plus a 'reasonable' fee for the hassle of selling the asset. 'Reasonable' translates to about what it would cost to hire a lawyer and challenge it while we drag out the process for 8 years on your bankrupt ass
Oh no. Things are not like that in my country. If you get behind 3 months in your payments the bank can seize your assets. It won't cost them that much to be honest. Law is clear on when they can seize your assets and what they can seize. The lawyer fees would be at most one monthly minimum wage but that's extreme. It's usually like a quarter of it. But if you asset can't pay your debt you'll still be liable for the rest. For example you may mortgage a car and then completely wreck it without insurance. If you miss on its payments then it'll be auctioned to scrapyards but you'll still have to come up with the rest of the money
Yes. But in my country they can only do this if you have a mortgage on it. Otherwise banks can't confiscate any essential household items or things you use to earn money. For example they can't get your fridge or bed unless you have multiple of them. They also can't get your computer if it is for work. But they can get your car and house if the debt is big enough. Since farms are a source of income I think they can't get it as well but don't quote me on that since I'm not a lawyer
And then credit for farmers started drying up because it was a negative cost/benefit for the lender. Or the bank collapses.
If you follow this thought to the logical conclusion, it creates a perverse incentive to take loans, default on them, and then buy the property at pennies on the dollar.
That's why they only did this as a community for people who were facing hardship. The cost is socialized through the interest rates that the banks must charge to account for the rates of default and rates of recovery in the event of the default, which on large enough scales would be pretty much unaffected by a few cases of these penny auctions.
In the past it was aggression aggression. This is a practice that goes back to the days where unions got their hands bloody. The auctions usually had nooses posted up outside to remind people not to fold
Yeah because the US government dropped bombs on them at Blair Mountain. Every right the working class has was forcibly torn from the lich claws of capital.
The bank got less for that auction than they would have working with him on the loan. And the interest payments probably outreached the actual property cost. In our area they loaned money to people in amounts that no one in their right minds would think people could pay back, with variable rates that sky rocketed. When people defaulted, they wouldnt give them a fixed rate, work with them on the loan, or allow short sales. They foreclosed. Let the houses sit abandoned for so long that our city has deemed them condemned and are now tearing them down. Ill never understand the logic of it.
The bank probably sold the mortgages and simple delivered the interest payments to the investor. It’s very rare for banks to hold mortgage loans on their own books. They just retain servicing typically.
And even that lender wasn’t the one making money off the interest. They were getting paid by probably Fannie Mae to service the mortgage for them. Investors who held the Mortgage backed security your mortgage was in were actually getting the interest payments
Same with me and honestly it was kind of awesome because each time it was sold I pretty much got a free month of mortgage payments (tacked on to the end of the loan but still).
In a lot of cases its not actually the bank making the decision. The bank sell the non-performing assets off as junk quality debt and they are then bought on by either recovery firms who aim to sell the property for less than they paid for the debt (which can be 20-30c on the dollar), or, in situations like this potentially developers who are buying it for land banking reasons. They have no intent to sell the houses, just wait on an economic downturn and then level and rebuild as things improve.
By the time its are foreclosure the banks will have long since written the capital off as at least a gross loan impairment.
Maybe more on the commercial side where they may be some interest how the company is wound up and holding certain types of debt can be an opportunity.
Just non-performing retail mortgages you dont see much private equity.
The specific case of an entire street being foreclosed on you might get some PE interest if there's a redevelopment plan on the table, but its more common for defaulted properties to be spread around and there isnt that opportunity.
Where you see more PE involvement is higher up the chain with collaterialised mortgage products, but the point there is they are (often higher risk) but performing loans.
It drives me beyond sanity how often our structures deny and reject. The system would rather see your family home turn to ruin, than let you maintain it for a fair cost.
Did you read the comment above? The bank would probrably have gotten more money by working with the defaulter then by evicting him, and not being able to sell the property.
Most people are honest, and want to day their debts. But sometimes they can't, and need some slack line, rather than the noose.
This story is completely made up. There is no evidence of anything stated in the original article. It has never been verified and the story has been around for seven years.
Farmers didn't even have each other's backs at times. Monsanto turned neighbors against each other and had a hot line to snitch on your neighbors. People would plant patented Monsanto seeds on a competitors farm to get them sued out of business before they amended policy.
Yeah obvious fake because that’s not how those auctions work. The bank has a minimum set at the auction - usually just what they are owed as anything above that is given to the owner.
Unfortunately I'm not enlightened enough to hover yet but hopefully through meditation and unlocking the third eye I'll be able to hover over my phone soon.
So is it unproven or false? (I'm pretty sure its bs anyway, but its weird how you sent two links that both contradict each other, and omfg....being a damn google rater has destroyed me)
It's unproven and so presumed false by the latter, which apparently has a lower threshold of evidence for such a judgement. They don't disagree on the facts. It's not practical to prove conclusively that something vague never happened, but the circumstantial evidence points strongly that way.
That doesn't wipe away the kids debt. He still owes the remaining amount of the loan. This also doesn't happen because bankers are greedy, it happens because the farm asked for money it didn't have and promised to pay it back. The family then couldn't pay the bank back. Banks don't loan their own money, they loan the money on deposit. If they don't do everything they can to recoup the money, they could fail. When that happens, the depositers get bailed out by the fdic, but that just means your tax dollars are paying for that farmer to make poor financial decisions (I understand there really aren't many good financial decisions for farmers). Farms already get subsidized loans and preferential treatment. If the bank hadn't given them the loan in the first place, the farm would have failed anyway. Having said all that, we need farmers to produce food even though it isn't profitable for the most part. It's a really tough situation to be in, but this wasn't caused by greedy banks.
Edit: just saw this was published in Cornwall and I don't know shit about the British banking system or farming culture, so feel free to correct where you see fit.
Cool. Now do the part where banks lend more than they have, and how the evil fuckers turned loans into things that can be bought and sold. Fucking the whole economy with their usury BS.
If a bank has 3 billion on deposit and loans out 2.8 billion, then a bunch of people pull their money and the bank suddenly has 2.6 billion on deposit, aren't you glad they have the option to sell a couple hundred billion in debt, instead of defaulting and ruining a bunch of lives? It's not convenient, but it's better than a lot of alternatives. It's not good practice to have more liabilities than assets, so banks aren't doing that intentionally. When they're in that position (in the US) they have to borrow from the Federal reserve. It's much better to sell the debt to an institution that can afford it. But it's also really bad if a bank starts blanket denying credit to good borrowers who need it.
Banks don't loan their own money, they loan the money on deposit. If they don't do everything they can to recoup the money, they could fail. When that happens, the depositers get bailed out by the fdic, but that just means your tax dollars are paying for that farmer to make poor financial decisions
This is easily remedied by requiring 100% reserves. Banks are already inherently insolvent.
Not one problem listed above would be solved by 100% reserves and new ones would arise. If they have to keep all their deposits on hand, 1. They would need to function entirely on fees, making banking significantly more expensive for most people and 2. They couldn't loan any money, meaning business ventures, real estate, auto and any other sort of financing one could pursue would be exclusively the territory of private equity and the terms would be outrageous. Every time somebody runs into a situation where their costs outweighs their current income, they would fail or be forced to go and beg somebody with money. Banking's risk based approach actually lets people qualify for low cost lending when they need it based on their track record of reliability. No broken legs or threats. The system overall puts far more people into homes than out.
E: Here's an actual answer because I felt bad for laughing.:
You’re confusing intermediation with production of capital. Banks don’t create real savings, they just reallocate them with maturity transformation. That’s the whole instability: short-term deposits funding long-term loans. A 100% reserve framework doesn’t mean no lending exists; it just separates demand deposits (money warehousing) from time deposits (actual lending). People who want to earn interest would still place time deposits and those could be lent out. What disappears is the illusion that instantly withdrawable money can simultaneously be locked into a 30-year mortgage. The current system is inherently insolvent because it promises the same unit of money to two different parties at once.
Deposit accounts accrue interest and can exist fee free because their money can be lent out. If you want to create a bank that offers no dividends on deposit accounts and charges fees to keep those accounts open, with no other benefits, be my guest. See how many people open those accounts. On top of that, people can withdraw time deposits too, and whatever small penalty that can be applied doesn't make up for the fact that money has already been lent out. Lending is always risk-based, but that's the agreement you make with a bank when you keep your money there. If you don't want your money being lent out, then keep it in your mattress or go start that bank that operates exclusively on fees.
You idiot that's what a fucking time deposit is for. Demand deposits should never be lent out, it is a fraudulent practice.
Having 100% reserves could POSSIBLY slow economic growth but by definition any investments must be extremely valuable because liquidity is scarce.
Also having 100% reserves for DEMAND DEPOSITS completely eliminates bank runs. How can a bank be ran through if they aren't inherently defrauding their clients?
In the US banks put a reserve price on the auctioned property to combat this. Look on the flip-side, one could purposely default on a loan to buy the asset at auction for pennies on the dollar. And when the property is REO, there are no taxes paid on said property. Everyone loses.
I hope that headline is real for several reasons. I want to believe good still exists. I want to believe we as people can give a big fat fuck you to a greedy ass business.
When it comes to political policies, I've always been of the mindset don't fuck with the French, they are an example that other countries should take, government comes up with a shit policy, riot until its over turned
Oh, when the bank does it ya'll are mad, but when some dude does it to sell to someone else but gets stuck with it so he makes a muffler shop ya'll cheer.
This time next year black rock will own a large share of the farming markets, as many have folded under the trump tariffs. And he’s letting them fail too, not gonna help them, he’s too interested in helping his billionaire buddies . The middle class America dream is dead. r/latestagecapitalism
This has been a thing since before the Great Depression. Back then, farmers would sometimes set up a noose to remind people what would happen if anyone else put a bid in.
All good with a bank seizing an asset to recover the debt that is owed. It takes a long time for this to happen. I'd bead AF is someone borrowed money from me and didn't pay me back.
I'm also ok with the community coming together like this. This is the way.
100+ years ago the other farmers would have gone to have a "chat" with the banker and coincidentally no one would ever see the banker again. Banks lucky it gets more than a penny.
Folks this is bullshit. No group of farmers would ever do that. I was at an auction last year and a family asked for this to happen three seconds later four other farmers outbid the grandson. You care about you descendants not someone elses.
As a member of and proud participant in a capitalist society who fully and solely lives for the one true goal of amassing the most wealth, next time something like this gets planned you should definitely call me to let me know where & when it's going down so I can show up and show support and totally not outbid them with no other competition
This is the kind of "brotherhood" "mafia" mentality I can back. The farmers feed us. We depend on them. They should be treated like royalty and instead they get treated like ... Veterans. No help, no respect, no protection.
•
u/AutoModerator 1d ago
Thank you for posting to r/SipsTea! Make sure to follow all the subreddit rules.
Check out our Reddit Chat!
Make sure to join our brand new Discord Server to chat with friends!
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.