Naked Capitalism Link of the Day

Today's link is from the Dayton Daily News, which I missed.  It is titled Major banks may give away discarded residences to cut losses:

City officials are in preliminary talks that could lead to donations of foreclosed and abandoned properties from the banks holding the mortgage loans.

Negotiating for an exit strategy from the mortgage meltdown, representatives for a foreclosed properties servicer that works with major banks met Monday with Dayton city officials to discuss the abandoned properties.

How the early discussions will shake out is unknown, but a potential outcome includes transferring some properties clogging up bank balance sheets to a land bank or some other public entity, a move that occurred earlier this year in Chicago.

In May, Bank of America announced a collaboration with the city of Chicago and a community group to give away 150 vacant and abandoned properties in and around the city. A bank spokesman said the bank agreed to pay as much as $10,000 per home for demolition, according to the Chicago Sun-Times.

Makes a lot of sense that the banks foreclosed on the homes.  I wonder what the total losses to the banks are on such homes.  I would assume a loan of about $80,000, probably $5,000 in foreclosure costs then maybe $10,000 more to have the city demolish them.  That doesn't work out well.  It would have been cheaper to cancel the mortgage and give them to the homeowner.  Of course, then the bank probably would have turned around and written another mortgage on the house.  I don't feel sorry for the banks, and I'm glad there are some homes in which government-backed mortgages aren't involved.