— Three thoughts on this:
People need to make certain that their foreclosure goes through. Nobody wants to be liable for the demolition costs on their own home.
This makes sense for the banks on trashouts. In many cases, the resulting property is worth less than zero because demolition costs may be greater than the value of the land.
This implies a rather large loss on the mortgage for the bank. It’s possible that toxic assets are not being undervalued.
