banks selling foreclosed properties

[adwbkk]

On 05/10/2016 at 3:09 PM, chiang mai said:

 

That is simply not true, by law the banks are not allowed to discount mortgaged properties they have repossessed.

It is and it isn't.   The bank sells at the price the property owes them so if there had been a deposit and a few years of payments that represents a significant discount on market price

Edited October 7, 2016 by adwbkk
Should have read the whole thread before I posted, shouldn't I

[chiang mai]

7 minutes ago, adwbkk said:

It is and it isn't.   The bank sells at the price the property owes them so if there had been a deposit and a few years of payments that represents a significant discount on market price

 

As stated earlier I was referring to (bank) book value which would include the items you mention.

[Liquorice]

54 minutes ago, adwbkk said:

It is and it isn't.   The bank sells at the price the property owes them so if there had been a deposit and a few years of payments that represents a significant discount on market price

 

That isn't always the case, as many of these properties go to auction.

Unless the bank stipulates a reserve price on the property, it could be sold for less than the amount owed.

 

The previous owner of my g/f family home purchased it new for 1.6m baht 6 years ago.

When she defaulted on the mortgage repayments, the bank repossessed it and it went to auction.

The SIL acquired it for 805,000 baht, but the outstanding balance was just under 1m.

 

Although the bank has recouped the vast majority of it's initial loan, the previous owner still owes them over 150,000 baht.

I understand a new repayment plan was agreed by the parties that was affordable to the previous owner.

[Bulldozer Dawn]

I can't believe how many doom and gloomers there are here on Thai Visa. 

 

Why is there such a staunch belief that a Thai bank will not discount the price of a foreclosed property?

 

The simple fact is that they do, and often, and you can very easily verify this fact yourself (rather than repeating the mantas of other ill informed TV posters)

 

Go to the link below and then click on KRUNGSRI. 

 

How to Find Thai Property Foreclosures

 

You will see on the very front page of their foreclosed properties website examples of discounts of more than 50%.  If, like I have been doing, you watch newly listed properties you will see for yourself that these are genuine markdowns from original list prices.  That is why I bought the house near the beach in Phang Nga (in girls name).  I liked the location very much and had already looked at the property when it was first listed  in the high 5s.  The bank then discounted it to 380,000 and I got it with an offer of 320,000.

Edited October 7, 2016 by Bulldozer Dawn

[KhonKaenKowboy]

Good for you...the same ill informed like to make up rules about the 800k for retirement extensions, too.  Your Sil's house is more like a short-sale than a foreclosure...it does appear that there is recourse against defaulters, which is only the case in some us states....otherwise, they call it jinglemail, when you simply mail in the keys and walk away...some banks will even pay defaulters money to not trash it.  I'vdbought homes from HUD, Deutsche Bank, and Credit Suisse...and one from an estate sale with liquor in the cabinet and a 20 yo Sony Trinitron.  All at very deep discounts.  I looked at all the bank props here and bought from a couple, who moved to lopburi and needed to sell, for about 400k less than a very similar but trashed house on the same street at baanwangtan.  Enjoy your house!

[sly4all]

On 05/10/2016 at 0:40 PM, chiang mai said:

If you don't believe the banks behaviour regarding the sale of repo's, perhaps you'll think about the sale of government bonds through the banks. Heavily advertised they offer one of the best returns around and are very safe, large tranches are offered from time to time and details of when and where are published in advance.

 

Show up at any Bangkok Bank branch and try to buy one of those bonds , even at the point of opening and you will be met with, "sorry, all sold out".

 

I'm in no way knocking Thailand, banks or the system, you just have to be aware that it's what it is and work around it.

 

mmmm, not my experience, I have been buying bond through Bangkok Bank (government and corporate bonds) since 2010, almost every year, last one in August this year. I have a good relationship with my branch, I let them know when I want to buy some and they let me know what/when its available. On some occasion I was too late and they were indeed not available anymore, but it was mainly me procrastinating... so you may want to change your branch ?

[KhonKaenKowboy]

Also, bkkbank have bond funds for 6 or 12 months that regularly start.  Returns are very close to the actual bond class, if not better.

[bark]

On 5/10/2559 at 3:09 PM, chiang mai said:

 

That is simply not true, by law the banks are not allowed to discount mortgaged properties they have repossessed.

You have no idea, what you are talking about. Once the buyer stops paying for about 8 months, the lawyers step in.

The banks, only care about getting the house sold. If the house is worth 5 million and there is only 4 million left.

They do not care about the owners one million.

Don't tell I wrong, It happened on my street. 

Have you ever seen a house that has been vacate for 2 years ? They have to discount to sell.

 

[invex]

Haha Khun Bark,

 

Sorry:

 

quote - You have no idea, what you are talking about.

Really, YOU have no idea at all.

 

quote - The banks, only care about getting the house sold.

Thai banks do NOT care about getting the house sold. Their properties are often priced higher than the market price.

 

quote - Have you ever seen a house that has been vacate for 2 years ?

I can show you hundreds of houses being vacant for 20 years.

 

Dream sweet.

[elektrified]

13 hours ago, bark said:

You have no idea, what you are talking about. Once the buyer stops paying for about 8 months, the lawyers step in.

The banks, only care about getting the house sold. If the house is worth 5 million and there is only 4 million left.

They do not care about the owners one million.

Don't tell I wrong, It happened on my street. 

Have you ever seen a house that has been vacate for 2 years ? They have to discount to sell.

 

OMG you have no idea what you are talking about. "Have you ever seen a house that has been vacate for 2 years ? They have to discount to sell." Are you serious??? There are houses all over Thailand that have been vacant for 10 or more years. There are literally hundreds of them, all within 10 minutes of where I live. More than 1/2 have bank signs on them. The banks haven't sent anyone to look at them in years. They are completely deteriorating.

[chiang mai]

There are posters in this thread who are trying to parlay heir experience of repossessions in the US and automatically assume things here in Thailand are exactly the same, I mean what could possibly be different, both countries have houses, banks, mortgages, surely they must be the same!!! Sorry guys, this aint Kansas and things, oddly enough, are not the same.

 

As previously stated by several others Thailand is littered with vacant bank repossessed properties that have sat empty for years, why, because the banks are not allowed to discount the loan they have on their books. And the idea that the banks here would actually pay a defaulting mortgage holder not to trash the place is surely a joke, in Thailand where most properties are run down anyway and the cost to renovate and renew an interior is absolutely minimal? Come on guys, wake up!

 

Finally on government bonds and the analogy I used earlier: Ministry of Finance issues high interest government bonds from time to time and typically these are sold through the banks, they are in much demand. Unless you are a high wealth customer or have an extremely good relationship with your bank manager there is virtually no chance of the man in the street ever being able to buy one of these, they are all reserved long before the date/time they go on sale. The foregoing is not to be confused with the secondary bond market in Thailand which is quite buoyant and easily accessible, albeit not as lucrative as first issue government bonds.

[chiang mai]

On 07/10/2016 at 8:13 AM, adwbkk said:

It is and it isn't.   The bank sells at the price the property owes them so if there had been a deposit and a few years of payments that represents a significant discount on market price

 

True, except until it is classed as a defaulted loan the interest rate clock continues to tick, another way banks avoid classifying a loan as NPL.

[chiang mai]

On 07/10/2016 at 10:38 AM, Bulldozer Dawn said:

I can't believe how many doom and gloomers there are here on Thai Visa. 

 

Why is there such a staunch belief that a Thai bank will not discount the price of a foreclosed property?

 

The simple fact is that they do, and often, and you can very easily verify this fact yourself (rather than repeating the mantas of other ill informed TV posters)

 

Go to the link below and then click on KRUNGSRI. 

 

How to Find Thai Property Foreclosures

 

You will see on the very front page of their foreclosed properties website examples of discounts of more than 50%.  If, like I have been doing, you watch newly listed properties you will see for yourself that these are genuine markdowns from original list prices.  That is why I bought the house near the beach in Phang Nga (in girls name).  I liked the location very much and had already looked at the property when it was first listed  in the high 5s.  The bank then discounted it to 380,000 and I got it with an offer of 320,000.

 

There's nothing doom and gloom about any of this, it's merely a question of establishing fact and separating that from the fiction that some posters recall from their previous lives back in the US! Hud indeed!!!

 

And you re-posting that same link repeatedly showing that banks have foreclosed properties for sale does nothing for the key arguments of discounts. Yes we know banks sell repo's there's never been any dispute about that, the question here is whether there are any "fire sales" and regular discounts of 50% blah blah blah. I am almost sure there are circumstances under which Thai banks will discount assets from defaulted loans hence I don't suggest it never happens, but it certainly doesn't happen on a sufficiently regular basis to impact market prices, which is the point of the BOT rule. And whilst the banks in Thailand have marketing departments that like to offer, ahem, cough cough, 50% discounts and fire sales from time to time, most often these are not what they might seem by virtue of the previous points about affecting market values and the BOT regs.

 

For Thai banks the work around for defaulting secured loans is BAM, a replacement vehicle for the FIDF, the former having an NPL rate of over 30%, in effect a proxy banking organisation which allows Thai banks to keep NPL's at reasonable levels. Here, read up on those two, the BOT regs. and a Bloomberg article describing BAM's public offering and purpose:

 

http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=23222297

http://www.bam.co.th/bam/property/

https://www.bot.or.th/English/BOTStoryTelling/Pages/FIDF_StoryTelling_FI.aspx

https://www.bot.or.th/Thai/FIPCS/Documents/FPG/2551/EngPDF/25510357.pdf

http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=23222297

 

[bark]

6 hours ago, elektrified said:

OMG you have no idea what you are talking about. "Have you ever seen a house that has been vacate for 2 years ? They have to discount to sell." Are you serious??? There are houses all over Thailand that have been vacant for 10 or more years. There are literally hundreds of them, all within 10 minutes of where I live. More than 1/2 have bank signs on them. The banks haven't sent anyone to look at them in years. They are completely deteriorating.

OMG, We are saying the same thing. After 2 years, the houses are over grown with weeds, trees etc. Yes, and these homes

can sit empty for many( 10 yrs) years. But they are still for sale, to anyone who wants to buy and fix them up. The price is cheaper then new, as the banks only want to get as close to what is owed. Problem is that Thai's are afraid to buy them.

But they are in fact for sale; and they are cheaper. And the banks only go to them; if someone makes an offer to purchase.

And OMG, that is all I am saying. Read before your lips move.

[KhonKaenKowboy]

Two somewhat unusual ways to go sightseeing in Bangkok Metro and explore "parts unknown (to most)."  First, just jump on any bus, pay the 6.5 thb (17 for aircon) and go for a long ride.  Eventually it will come back to where you got on, or be at a main transit hub, like Bang Su.  Lots of fun, no kickback stops, no pa systems, lots of working girls with actual jobs....the real Thailand.  Secondly, go to the bank property sites and pick some lower priced condos, make a day of it, and go have a look...it is really an eye-opening experience on the prospective real estate market, and it will help you learn how to use the busses, vans,  and canal boats.  I had a nice trip to HappyLand last Summer...the condo was a dump, but the market was incredible...how many expats can say they've been to HappyLand...some real good lookers out there, too.

Edited October 10, 2016 by KhonKaenKowboy

[Bulldozer Dawn]

7 hours ago, KhonKaenKowboy said:

Two somewhat unusual ways to go sightseeing in Bangkok Metro and explore "parts unknown (to most)."  First, just jump on any bus, pay the 6.5 thb (17 for aircon) and go for a long ride.  Eventually it will come back to where you got on, or be at a main transit hub, like Bang Su.  Lots of fun, no kickback stops, no pa systems, lots of working girls with actual jobs....the real Thailand.  Secondly, go to the bank property sites and pick some lower priced condos, make a day of it, and go have a look...it is really an eye-opening experience on the prospective real estate market, and it will help you learn how to use the busses, vans,  and canal boats.  I had a nice trip to HappyLand last Summer...the condo was a dump, but the market was incredible...how many expats can say they've been to HappyLand...some real good lookers out there, too.

I don't have to day trip out into real Thailand.  I live there full time.

[Sparkles]

This morning Kasikorn Bank has a display of properties on boards outside their branch at Mae Hia .Big C.

 

Staff in attendance.There is also a 20 page, take away booklet, of available properties for anyone who is interested.