I’m trying to get a concept how the REO process works.
I understand that when a bank initially takes on an REO, the incur these expenses: the loan balance on the property, accrued interest on the property, attorney’s fees, and all other costs associated with the foreclosure process. And of course when they sell, they have to pay out agent commissions.
So does the bank incur any additional costs over the above while holding the property other than the mortgage payments they aren’t getting? I’m guessing they’ll have to pay property taxes, but are there other costs?
Additionally, do you think a bank would be more receptive to a loss on a house if the sale occurred at the start of their fiscal year vs. the end?
To be clear, a *fiscal* year is the 365 day period a business uses to track expenses. It may or may not follow the calendar year. In my experience, it’s easier to deal with a loss earlier in the fiscal year (so it’s already factored into end of year estimates) than at the end of the year after said estimates are already in place.