Buyers' Revenge: Trash the house after foreclosure.

[trof]

Banks Pay People Off
To Deter Home Rage;
Loose Pets, Paint Spills
By MICHAEL M. PHILLIPS
March 28, 2008; Page A1

LAS VEGAS -- Eddy Buompensiero noticed eight pairs of shoes outside the door of the modest house on Mother of Pearl Street, evidence that the former owners were still living there even though the bank had foreclosed.

Mr. Buompensiero, a gray-bearded inspector for REO Asset Services-1st Realty Group, rang the bell. When no one answered, he taped a letter to the door offering the occupants $1,000 to move out. The catch: They won't get a cent if they trash the house before they leave.

These days, bankers and mortgage companies often find that by the time they get the keys back, embittered homeowners have stripped out appliances, punched holes in walls, dumped paint on carpets and, as a parting gift, locked their pets inside to wreak further havoc. Real-estate agents estimate that about half of foreclosed properties to be sold by mortgage companies nationwide have "substantial" damage, according to a new survey by Campbell Communications, a marketing and research firm based in Washington, D.C.
http://online.wsj.com/article/SB120665586676569881.html?mod=googlenews_wsj

Whoa!
Sum pissed off peeps.

[cloudbase]

1. Such adult behavior. n/t

[GodlessBiker]

2. Don't make your pets do it, lure raccoons and squirrels into the house.

[tuckessee]

17. Yeah, that's the ticket.

Killing & abusing wild animals to damage another's property is cool.

[GodlessBiker]

22. No. You feed them in there. Then let them go.

[Warpy]

23. Or just walk out, leaving the front door unlocked

with a "Property is Theft" sign on it. Vandals will strip the interior of everything, including copper wiring and plumbing.

Then there's the chicken scraps in the heating ducts trick.

There are a lot of ways to trash a house. When lenders realize this, they'll all start figuring out ways to prevent it, and those ways will involve dealing with the foreclosed owners a lot more kindly than throwing them out onto the street like so much garbage.

We sure as hell will grow old and die waiting for the government of we the people to step in to protect us.

[RaleighNCDUer]

28. Or, OTOH, the foreclosers will go back to the bad old days when

they had a deputy accompany them to the house when the hand them the papers, put them on the street, then have their own people empty the house, leaving the former owners to try to come up with a truck to move their belongings before they all disappeared off the curb. The former owners can only trash the place if they have some lag time between notification and eviction.

This is not the first time in our history we've gone through this - where do you think the folk mythologies of the post-Civil War (James brothers) and Great Depression (Bonnie & Clyde) came from? Both situations where banks were foreclosing on family homes in massive numbers, and that is what the banks resorted to when this sort of thing happened.

[Warpy]

32. There's always lag time

because people know when they stop paying the mortgage sooner than the banks know they can kiss the payments goodbye forever.

[dysfunctional press]

72. that's generally how evictions are still handled.

and if people who have been foreclosed on refuse to leave, it's what will happen to them.

[SammyWinstonJack]

42. Bag of potatoes works better in the heating ducts better.

Plenty stinky. :evilgrin:

[dysfunctional press]

73. sardines in the shower curtain rod is good too.

there are lots of great places to hide rotting flesh, when you put your mind to it.

[elehhhhna]

86. chicken scraps? why not shrim tails? and don't forget the old

concrete mix in the toilet trick

[DS1]

3. bunch of savages in this town

[flvegan]

4. Much easier than keeping a loan performing, right?

:sarcasm:

Some loans can't be saved, but so many of them can. Lenders should try harder.

[Hekate]

8. Lenders absolutely should try harder to keep people in their homes...

...but I'm guessing the predatory lenders don't give a damn.

I would find it very hard to trash anything, but then again I have not been raped by my bank. Some (a lot) of these people have good cause to feel embittered.

Hekate

[Clear Blue Sky]

5. Isn't that what the security deposit is for?

[kestrel91316]

9. WHAT security deposit? The homes in question are OWNER-OCCUPIED foreclosures.

[HereSince1628]

10. Mortgage owners don't have security deposits.

They usually have insurance policies.

The motivation seems to be to ensure that the loss of a family being foreclosed isn't going to be someone elses bonanza.

Read about the evictions of the Irish and you'll understand some of the cultural orientation to evil landowners and beadles.

[MadHound]

19. The problem is that most of these people got their own selves in trouble

What with taking out a no money down ARM on a house that was completely out of their budget range. So now they're going to punish the mortgage holder, along with the rest of the neighborhood for their own stupidity. Class act:eyes:

[noamnety]

26. Do you have statistics on that?

How many had a financial change in their circumstances - laid off, divorced, health crisis, huge inflation in gasoline, health insurance, food, utilities - that affected their budget in unanticipated ways?

[MadHound]

40. Take a look at the numbers of ARMs that went out

Take a look at the number of people who suddenly got into flipping houses as a method of making the quick buck. How many people took on a house that was too big for their budget. Sorry, but these people have only themselves to blame. Yes, people have the crises of life come up, but that's not what I'm talking about here. I talking about people who went into these houses of their own free will without either educating themselves, or putting blind faith in the notion that it would all somehow work out.

[noamnety]

45. So ... that's a "no" on statistics then? (nt)

[MadHound]

68. No, I was hoping for once that I had found an energetic person on DU

One who would actually do their own research. But sadly, I'm disappointed again. I guess people do want everything spoonfed to them, no wonder we're dealing with a less inquisitive population.

OK, get this, for I'm only giving it once:

13.9% of the US mortgage holders are paying fifty percent or more of their paycheck every month to pay the mortgage. Usual, traditional funding rules state that one should never be paying more than 25% of one's monthly income. A lot of people out there who are buying way too expensive a house for their budget. <http://njrereport.com/index.php/2007/09/12/a-lot-of-people-are-buying-too-much-house/>

ARMs are approximately twenty five percent of the market, even still.
<http://marketplace.publicradio.org/display/web/2008/03/27/housing_madness_arms/>

And finally approx. ten percent of the mortgage market was in flipping houses or the kinder term, residential investment<http://rds.yahoo.com/_ylt=A0geu6P0.PNH6QsAK4JXNyoA;_ylu=X3oDMTEyZXRsbm5kBHNlYwNzcgRwb3MDNQRjb2xvA2FjMgR2dGlkA0Y3NTVfNzQ-/SIG=138kk9ubi/EXP=1207257716/**http%3a//www.jchs.harvard.edu/publications/markets/son2007/son2007_housing_markets.pdf>

[noamnety]

76. I figure if it's your assertion, it's yours to cite a source.

I do my own research when I cite my own statistics, which is fairly often.

The reason I asked was that you claimed this: "What with taking out a no money down ARM on a house that was completely out of their budget range" and I hadn't seen claims that over 50% signed mortgages that were out of their price range with given their circumstances at the time of the mortgage signing.

The number you cited, the 13.9% who pay more than half their paycheck on mortgages, that's not a meaningful number if it's mortgage "holders" - because that includes those whose circumstances have changed substantially since they signed (medical crisis, layoffs, etc.)

I was asking about your statement, which spoke to their circumstances at the time they signed the mortgage (taking out the mortgage when it was out of their range, rather then hanging onto a mortgage after it became out of their range).

[LanternWaste]

63. Yep-- my pal has only himself to blame...

Yeah... I had a pal who bought using an ARM. His future looked bright, company car, good health insurance, he was promised advancement in his company. But then his boss lost it all and was forced to close the company.

Yep-- my pal has only himself to blame... :eyes:

[MadHound]

69. Why didn't your pal get a fixed rate?

Look, I realize that shit can happen to anybody, no matter what type of load they get. However why did your pal saddle himself with an ARM?

[elehhhhna]

87. take a look at the fact that while the US had the lowest interest rates

in DECADES, the mort. co's would not write fixed-rate loans w/o exorbitant fees, and pushed adjustables HARD on everybody who wanted a loan.

[wtmusic]

41. The people who are least likely to trash

are the ones you describe: honest and hardworking victims of an unforeseeable circumstance.

As a former "evil" landlord I can tell you this: it was the people who were out buying motorcycles and jet skis instead of paying their rent who trashed the place when they were evicted.

[blondie58]

94. I know of many individuals that are caught in the ARM situation

who did not know that it was an ARM. Sure, they signed the contract, but in all reality, don't you usually just sign where they tell you to on the ten or so pages? One lady I know said that she told the mortgage person that she specifically did not want an ARM, only to come to find out later that it was one.

[samdogmom]

12. Ummm! When you OWN the home there's no "security deposit"!

LOL!

[Clear Blue Sky]

93. Whoops! My bad...

[RaleighNCDUer]

30. This is eviction from owned homes, not rented.

And yes, that IS what security deposits are for, for renters.

I've never failed to get my deposits back because I usually leave my rentals in better shape then when I moved it - if something needs fixing I'll fix it myself rather than have the landlord's handyman tromping through my place.

but that's a different discussion.

[TheWatcher]

47. These people are homeowners, not renters

You are a bit confused there.

[HereSince1628]

6. a version of Russia's scorched earth response to Napoleon?

The barracades of Bastille Day are being made from sofas and carpeting.

[rateyes]

7. Good luck getting another loan. Real smart.

:sarcasm:

[Taverner]

13. "Nothing more dangerous than a man with nothing left to lose"

[annabanana]

55. bingo!

The social contract is near to breaking and there aren't enough cops in the world to deal with starving, homeless people when the wealth is too closely concentrated....

You'd think the oligarchs would figure that out without all the bloodshed...

[Xithras]

57. That's the great thing about it. There are no long term credit or legal impacts.

Unlike renters, lenders don't share information on how "good" a homeowner was. There is no recourse.

And until the foreclosure is completed, it's legally THEIR HOUSE. If they want to trash the carpets, knock holes in the walls, and give away appliances, it's their legal right to do so.

[ShaneGR]

71. Technically you are correct, except they could face criminal charges

Vandalism, animal cruelty, etc.

[Xithras]

74. It's not illegal to vandalize your own home.

Again, as long as the damage is done before the foreclosure is completed, they're legally damaging their own property. Nothing illegal about that.

Animal cruelty charges could be pursued for those who leave their pets inside, but I'm guessing that doesn't happen too often. Most people just let their pets go if they can't keep them.

[ShaneGR]

79. I did want to point out that even the act of abandoning a pet is illegal....

It's called pet abandonment, and it's on the books as a law in most states. Not prosecuted much, because the animal has to be tied to the owner and many times they just get executed in kennels within about a month.

[bad_robbie]

59. Forclosure

I suppose that it's pretty hard to get another loan after a foreclosure, whether or not you trash the place.

[Robbien]

11. The majority do not do this. But the media keeps pushing 'blame the victim' meme

Most foreclosures are wrecked by the metal junk men you see everyday combing the streets and allies for scrap metal from foreclosed homes.

Every once in a while, a homeowner gets ticked off and wreaks the house upon leaving. And of course that is the image the elite wants to push: "The homeowners are all at fault. No one else is to blame, just the stupid classless homeowners. See what low-life animals they are, going around wreaking other people's property."

[54anickel]

34. Ungrateful wretches! Bush tried his best to give them a leg up in this

great nation, creating "the ownership society" and this is how they show their gratitude.....

Do I need to add :sarcasm:

[backscatter712]

52. Watch for the scavengers. Scrap metal's getting pretty valuable.

After the ex-owners leave, scavengers will come in, pull aluminum siding off the house, take copper and brass plumbing and fixtures, take all the copper wiring, anything that's worth money, whether it's nailed down or not.

Pissed off foreclosees, I'll bet don't do as much damage as the sensationalist media would lead you to believe. Scavengers, and gang-bangers tagging the house and breaking the windows will do the majority of the damage - the house will be a total loss.

[RavensChick]

14. Can you blame them?

When the former owners move out and take everything INCLUDING the kitchen sink, that should be a sign of how they feel.

[glowing]

15. You would think the banks would go in and re-negotiate a fair market price

with an affordable mortgage, rather than lose money taking on a foreclosure. It doesn't make any sense to me.

[flamin lib]

18. Part of the prblem is that nobody really knows who the lender is anymore.

With the mortgages bundled into derivatives and sold on the stock market, who do you negotiate with?

[wtmusic]

38. Whoever you make the check out to

is always in a position to negotiate. Whatever "bundle" they're in doesn't affect the homeowner one way or the other.

[flamin lib]

43. Actually it isn't that simple. The one you write the check to is responsible

to the one who lent the money and that entity is very cloudy right now. You can't negotiate with the clerk at the convenience store even though they take your payment. Determining exactly who owns the mortgage is becoming very difficult.

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20071208/BIZ01/712080349/1001/BIZ

http://pubcit.typepad.com/clpblog/2007/12/another-ohio-ju.html

[wtmusic]

50. These were just procedural oversights

Wells Fargo owned the loan; they just couldn't prove it. They didn't cross their T's and dot their I's, so they lost. They will refile and win.

Whoever collects your check each month has a vested interest in continuing to do so, and banks are more than willing to work out alternative arrangements rather than put a home into foreclosure in a stale real estate market.

[drm604]

48. How does the lender forclose

if nobody knows who they are? I'm not doubting what you're saying, but I'm curious as to how this would work.

[depakid]

64. In many states, if the "lender" can't produce the actual note

as proof that they own the debt, they CANNOT successfully foreclose.

[Fla Dem]

78. You would think...but heres the problem they're facing

Many of the foreclosed properties are because the borrowers were sold an "interest only" mortgage, or a "no money down" mortgage or low interest ARM or a combination of any or all three. With the ARM the interest rate would go up say in 3 years, but they were told their house would appreciate over time and they could refinance at a lower rate using the "new value" of their home as equity. So most have not paid very much against their mortgages. Then the housing market collapses and not only is their home not worth more, now its not even worth the amount of their mortage. So they bought a $200,000 home, now worth say $150,000. They have outstanding mortgage loan for $200,000 and no equity. I guess a bank could fall back to the lower rate, but a lot of the home owners are just walking away from the homes because they don't see any point to paying for a loan worth more than their home.

The other side of this are more established homeowners who had a lot of equity in their homes and borrowed on that equity for home improvements, kids college tuition, big purchases, etc. With the housing collapse, they either have no equity in their homes now, or a very reduced amount, and still have to pay off what they borrowed.

[glowing]

85. I know of a family that saw the prices dropping like a rock on his street while

he had paid a higher price... He bought across the street at a lower, "truer" price and let the house across the street foreclose. So, they have the same house, lower price, on the same street.

[54anickel]

16. I remember similar situations in the 80's when I lived in AZ. Lots of new housing

developments going up, then the market tanks and there are partially finished homes and developments, foreclosure homes all available for pennies on the dollar if you considered yourself handy and had a good down payment. The people foreclosed on were at least using their noodle when they "trashed" the place. They'd "carefully" remove cabinets, sinks, doors, etc. and sell them at the fleamarkets. Helped themselves out a bit financially and helped the Mr. Handyman type who purchased an unfinished or "trashed" home. Enterprising folks back then.....

[RaleighNCDUer]

33. That was during the S&L collapse. I remember it well.

Wasn't there a Bush involved in THAT, too?

Fucking nazis, wreaking their revenge on the US.

[Occulus]

46. Considering the grandfather, your Nazi reference may be completely accurate.

Godwin can go straight to hell.

[KamaAina]

51. There was a McCain involved in THAT, too

http://en.wikipedia.org/wiki/House_and_Senate_career_of_John_McCain%2C_1982%E2%80%931999#Keating_Five

McCain's upward political trajectory was jolted when he became enmeshed in the Keating Five scandal of the 1980s. In the context of the Savings and Loan crisis of that decade, Charles Keating Jr.'s Lincoln Savings and Loan Association, a subsidiary of his American Continental Corporation, was insolvent as a result of some bad loans. In order to regain solvency, Lincoln sold investment in a real estate venture as an FDIC-insured savings account. This caught the eye of federal regulators who were looking to shut it down. It is alleged that Keating contacted five senators to whom he made contributions. McCain was one of those senators and he met at least twice in 1987 with Ed Gray, chairman of the Federal Home Loan Bank Board, to discuss the government's investigation of Lincoln.

Between 1982 and 1987, McCain received approximately $112,000 in political contributions from Keating and his associates. In addition, McCain's wife and her father had invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators. McCain, his family and baby-sitter made at least nine trips at Keating's expense, sometimes aboard the American Continental jet. After learning Keating was in trouble over Lincoln, McCain paid for the air trips totaling $13,433.

McCain and some of his family at the September 1992 christening of USS John S. McCain at Bath Iron Works in Maine. Left to right, John McCain; his mother Roberta McCain; his son Jack; his daughter Meghan, ship's maid of honor; and his wife Cindy McCain, ship's sponsor.Eventually the real estate venture failed, leaving many broke. Federal regulators ultimately filed a $1.1 billion civil racketeering and fraud suit against Keating, accusing him of siphoning Lincoln's deposits to his family and into political campaigns. The five senators came under investigation for attempting to influence the regulators. In the end, none of the senators was charged with any crime, although McCain was rebuked by the Senate Ethics Committee for exercising "poor judgment" in intervening with the federal regulators on Keating's behalf.

Yeah, I'd say this is a perfect time to put someone with sleazy ethics and high-finance cronies in the White House, wouldn't you? :sarcasm:

[DU9598]

20. Very common

The only Republicans on our block got divorced and the house went through foreclosure. The wife stuck around and left the house with broken out windows, no appliances, and she even peeled the old wood trim off the floorboards. Now a nice, gay couple have moved in and are repairing the damage. Poetic

[flamin lib]

21. As an ex-agent I saw this a lot even before the sub prime meltdown.

If it takes a year to get someone foreclosed that's a long time for stress and anger to work on someone. Many times it's taken out on the property--better that than the spouse or kids.

Even worse are bitter divorces--If I can't have it, you can't either.

On the other side I've seen foreclosures where the people cleaned the carpet and touched up the paint before they left. Those generally made me cry.

[taught_me_patience]

24. I can't see how anybody can defend

this type of childish behavior.

[ozu]

25. ...

Not very bright.

It mildly inconveniences the lender and completely destroys your ability to get another loan, or possibly rent in some areas. Well played.

[durablend]

54. You do realize...

That they're (the ex-homeowner) likely ALREADY screwed with that foreclosure/judgement on their record. Not likely some damage is going to make it much worse for them (ergo the "nothing to lose" attitude)

[DarbyUSMC]

27. This is why "renters" have a bad reputation. Many times, whether it be

due to a dispute with the LL or an eviction, places are trashed before moving on. Even though that occurs a minority of the time, that is why many people won't buy a home next to rental property. It has always made it difficult for responsible renters when a previous tenant has stuck the LL with unpaid rent or damaged property above and beyond what a security deposit covers.

Now we have people, who probably had previously been renters rather than owners, behaving in the same fashion because they signed on the dotted line without reading the fine print or researching the type of mortgage they were getting. Meanwhile, GWB was on TV bragging about the fact that people who had never had their own houses before, were able to move into their own homes due to his policies or the great economic picture he painted for the unaware and faithful.

Maybe there are many people who just didn't realize what an adjustable rate mortgage was or what it could do to their new found happiness. Here again, there is that bottom line deal. Take responsibility for your decision, bite the bullet, move on, learn a lesson (albeit a hard lesson) and don't believe everything you hear. You don't get something for nothing and you can't live in a house that you know good and well is way beyond what you could have afforded in "real life". In the land of Oz maybe, but not in the USA, where one day you have a job and the next day the company has moved out of the country.

Beware of Greeks bearing gifts. Sometimes it's better to have nothing so that you have nothing to lose when things go belly up.

Trashing the house? Good grief, don't do it. Leaving pets behind? A crime; incomprehensible and gives a bad reputation, as a whole, to basically good people who are losing their dreams. Not that anyone asked me, but, if by chance anyone did, I'd say don't burn your bridges or bite your nose to spite your face. Face the music like responsible human beings. If help is around the corner, it's not going to be there if you've wrecked your good name vandalizing what you once considered your own home.

[RaleighNCDUer]

36. the OP was not saying "leave the pets behind" - he was saying

"leave the pets inside". Don't take the dog for his walk for a week - the dog will do what he's gotta do, ruining the carpet and maybe the floor itself.

It's STILL animal cruelty, because dogs do not naturally foul their own dens and it would be mentally cruel to force them to do so - but it's not leaving them to starve.

Other than that point, however, I agree. Shit happens, and grownups take responsibility for the shit that happens to them, whether they are technically at fault or not. Learn the lesson and move on.

[The Stranger]

29. Anyone who would lock their pet inside (considering some have starved to death) is a fucking monster

[philosophie_en_rose]

31. That's lame.

I can see not cleaning up and taking appliances, but destroying the place is too much.

[-..__...]

35. Too bad there's probably no way to file criminal charges against the hot-heads.

Technically... the miscreants really don't own the house until the mortgage is paid off, but even if criminal charges were filed, it probably wouldn't be worth the banks/lenders time, money or effort to pursue the matter.

[flamin lib]

44. It is illegal and charges can be filed, but to what end? They obviously

don't have any money so why add legal costs to repair costs? Get a judgment? These are the most judgment proof individuals ever!

[Xithras]

58. No, it's perfectly legal. How would it be illegal?

If the damage is committed before the foreclosure process is completed, the home still belongs to the resident both legally and by right of possession. If you want to knock holes in the walls of your own home, crap on your own carpet (saw that in an REO last month), or pull out your own cabinets and appliances, there's nothing that can be done to stop it. The home does NOT revert to the ownership of the bank until the foreclosure is completed, so the bank is essentially just a lienholder when the damage is committed, and has no rights to the property other than to collect debt secured against it.

Stupid and childish? Absolutely. Illegal? Not at all.

[flamin lib]

84. No, the house is collateral securing a loan and to do anything that

destroys the value of the collateral is illegal. Still who cares, there isn't any money to go after so why run up legal bills?

[wtmusic]

37. Revenge? For what?

Not being able to pay their mortgage? :crazy:

[mdmc]

39. riot the unbeatable high

[notadmblnd]

49. Around here, they've been called "forclosure parties"

I started hearing about them a few months ago. Haven't attended on though.

[Xithras]

53. Very common here in central California.

As I mentioned yesterday, I was recently looking to pick up a few foreclosures as investment properties. ALL of the REO's were in sorry shape, and roughly half had damage that had been committed by the homeowners. By far the worst I saw was a 3500 square foot 6 bedroom home where the owners had plugged the upstairs sinks (and there were many of them, since each room had a private bath) and let the water run. I was wondering why a previously $700,000 home was on the market for $225,000, but figured it out the moment I walked through the door. The upstairs hardwood floors were all warped, and the downstairs sheetrock had all either collapsed or was on the verge of doing so. I found out later that the water had run at least a week, and that it was only found when a neighbor had gone searching for the source of the water flooding his yard. Rather than fix it properly, they just shut the water off at the main and left the house closed up.

Every square inch of surface that hadn't been destroyed by the water had been covered by mold. The $225,000 asking price was too much, so I offered $120,000...the county assessed value of the dirt lot underneath it. The bank turned the offer down, and the house is still sitting on the market molding away.

[rateyes]

60. I hope the lienholder sues the bastards.

[Xithras]

65. On what grounds?

It was their home. If the damage was committed before the foreclosure was completed, the leinholder has no grounds to sue. A lienholders rights are limited to seizing the home and trying to sell it to cover a loss. There are no legal limits to what a person may do to their own home, and the bank has no say over the property until the judge awards them ownership of the home.

Remember that the bank does NOT own the home, the homeowners do, and they're free to treat it as well (or as poorly) as they see fit. That means everything from deliberate damage to crappy DIY remodels.

[Dreamer Tatum]

80. Many, many mortgages have moral hazard clauses

They're just hard to enforce since the only time they have teeth is when all is lost anyway.

Claw-hammer parties and other childish, destructive behavior is the real cost of zero-down mortgages. If LTVs
were less than 100%, people would not only take better care but might even pursue short sales.

I am willing to bet that damages are highly positively related to LTV.

[burythehatchet]

56. Don't fuck with Pussy's brother

:rofl:

[davsand]

61. Mold is a biggie.

I was in a foreclosure property this morning where the owners ran water into the basement and left. There is mold all the way thru that house as a result. Literally, it is in the duct work, the walls, and the wooden structural supports (floor and roof alike.) I was wheezing by the time I got out of that house and I've been taking antihistamines since..

This property sold for $370,000 a couple of years ago and I will tell you that I doubt they will be able to sell it now for anything more than $100,000 in spite of how much the bank has outstanding on that loan. The last contractor estimate I saw was over $100,000 to remedy the mold problem--and it doesn't even address the other issues present like replacing all that molded carpet. That $100,000 is removal of the existing mold including the mold in the drywall,the wood, inside the ductwork, and getting the molded carpet out of the house. There is no real guarantee that the mold will never come back, either.

Yeah, it IS that bad...



I was in a really nice house earlier this year in a fairly upscale subdivision that had suffered a similar fate. Literally, they (the mortgage lenders) sold it for the value of the lot because that house could not be saved--it had to be destroyed. That property had a loan on it for over $500,000.

A lot of people strip out stuff like cabinets and fixtures, but thankfully not too many work terribly hard to completely destroy the property.


Laura

[Redstone]

62. I saw that in the newspaper. How disgusting that some people are SO low-class that

they'll trash a house when they move out because their mortgage has been foreclosed.

This may not be a popular opinion for me to express on DU, but there it is. You got into a mortgage you couldn't really afford? Not the bank's fault. You had a real-estate bubble in your town, and got over your head in home-equity borrowing? Not the bank's fault. You can't make the mortgage payments because of losing your job, or because of health problems? A damn shame, to be sure, but not the bank's fault.

What the fuck ever happened to the concept of having some dignity in this country? If I lost my house to foreclosure, no matter why it happened, I'd have enough basic dignity to leave the place is good shape.

But maybe I'm just old-fashioned.

Redstone

[rateyes]

66. Good post.

[Dreamer Tatum]

82. Here, here. Well said.

But you have to expect cruddy behavior from people who (a) didn't make a down payment, and (b) are paying interest only. That's more or less the definition of renting. The lenders shouldn't be shocked at the moral hazard, but people should act with dignity.

[sentelle]

95. hmm

You got into a loan you couldn't afford?

You mean the bank's loan people didn't verify income? Or were they more concerned with 'getting the loan' and converting it? A few banks (think WaMu) did whatever they could to get the loan, including help 'find' (at least on paper) new income sources, 'shop' appraisers, etc., just to get the loan. So maybe, the bank is partially at fault.

Do this a few times (the bank I mean) and you set up a bubble market.

My wife and I are fortunately not in that situation. We are in one of the few areas still appreciating, and have the house paid off. (Of course then again, real estate taxes have also shot up 18% a year the past few years too).

The problem is a lack of ethics from everyone concerned: homeowners who want in on the real estate frenzy, (partially created by) banks who are lax with lending (see Bartcop rule #2, if someone makes a mistake that earns them money, watch them repeat it over and over), rinse and repeat.

It is when the banks remember that their reputations rely on ethics, and not just stock price, will real estate return to sensibility.
Only then will opportunistic buyers be turned away, and not be hoisted on their own pitards (and in doing so, protect the normal homebuyers)

[Jed Dilligan]

67. Took me a while to decide how I feel about this.

On the one hand, anything that gets done to bank and real estate people is okay with me, because they are in my opinion the scum of the earth. They are somewhere between Republicans and child molesters on my scale of giving a fuck what happens to them.

On the other hand, I don't want to see construction companies getting any extra business from these antics, nor do I want to see housing prices rise because of them taking housing out of the stock until it's repaired or replaced.

My solution would be to just disassemble the house and sell off all the lumber, pipes, etc. before the foreclosure went through.

[ShaneGR]

70. While I feel for these people, this stuff is actually ILLEGAL and punishable with prosecution

Vandalism is illegal. They don't own it, they can't destroy it.

Animal cruelty is illegal, I think it shows a lot about a person or family that "locks their pets" inside so they can be left to forced caging while living in their own shit and piss until someone rescues them. Do these people then try to reclaim their "pets" after they've basically left them to live in their own shit for weeks until someone saved them?

Don't forget, these people made a deal. They signed on the bottom line agreeing to pay for something. Then when they can't pay they destroy it and lock their pets inside like it was someone elses fault other than their own. People need to learn to LIVE WITHIN THEIR MEANS. If you can't afford a house, don't buy it. If you don't have enough money to survive if something bad happens for a year, don't buy it! Whatever happened to PERSONAL RESPONSIBILITY.

[Doctor Cynic]

75. Unfortunately, people were *duped* into signing contracts.

The industry calls them "liar loans" because the agents encouraged people (especially those who aren't very educated in legal matters) to misstate their income, their assets, etc, and misled them to ensure they don't know about adjustable rates.

Then they bundle those loans and ship them off until no one knows who owns what. So banks everywhere in the world have bled cash because of irresponsibility.

To make matters worse, this causes house values to plummet, causing many mortgages to worth more than the actual house. 10% of California mortgages are in this state. This only encourages more homeowners to foreclose.

And legally, the bank does not own the house until they complete the process. So nothing is illegal here. Zip. Nada.

Since their credit score is trashed regardless, why not employ the scorched earth policy and make the house useless to the bank?

[ShaneGR]

81. Ok, here's my problem with your argument, and I understand most people get excited....

I know, people get the chance at a nice house. They don't read the fine print. They don't prepare for that balloon payment 2 years from now because, well, its 2 years and "we'll figure it out." The economy is booming, if we run into trouble we'll just sell it and probably make a profit too!

But, I was raised to look at every penny. I was raised to read contracts like they are contracts. I was also raised that if I was asked to sign a contract, and I didn't understand it, I would show it to other people and ask their opinions. I was raised that when I buy a home, I have a hefty down payment and five years of payments in an interest bearing account as emergency funding.

The reality is that it wasnt the brokers fault, the banks set the limitations, not the brokers. It was the banks letting people who clearly SUCK AT MATH buy homes they could never afford if even a bad month happened. Or they spent too much on their credit card. The "missstatement" stuff is garbage, any bank could of spent $10 extra an app to pay someone to carefully examine it. They didn't. They relied on what amounted to credit fraud and hyperbole.

There is no such thing as savings in this country anymore except for the people who are smart enough to put even the smallest amounts of money aside. If a person saves just $100 a month, from the ages of 30 to 60, they will with safe investing have somewhere around $200,000 available at retirement. If they were smart, they also had a 401k account. And they've paid off their house. They're ready to retire. It's a shame most Americans aren't trained from an early age to prepare for that day when its time to enjoy your final days.


Look, I know I sound like a jerk. I'm talking down to these people. I know that. But I've created my own franchise business, I've managed employees, and I think it's a shame that people rush into these things without someone just coming out and saying, "WTF IS WRONG WITH YOU." STOP BORROWING WHAT YOU DONT HAVE. SAVE SOME MONEY. IF YOU CANT PAY FOR IT NOW WALK AWAY FROM THE DEBT, RENT A HOUSE, AND SAVE FOR SEVEN YEARS. But please, start paying within your means. We need personal responsibility in this country again. From the President on down.

[zalinda]

77. Here's the reason there is so much anger

A few years back, I was in the process of buying a house. The owner was more than willing to let us move in before all the paper work was finished. I was very happy about it, until a couple of weeks later I found out why. The house was being foreclosed on, and the papers had already been drawn up before MY paperwork went through. I received the papers and found out that once the papers hit the authorities, ABSOLUTELY NOTHING can be done to change anything for an entire year. Once the papers are filed, you could have won the lottery and had all the money for the house, and you can do nothing.

In the end, the house sold for $3,000 at auction, a bank picked it up and resold it for $55,000. So, the bank that owned the house, wrote off the amount owed, as a bad debt and the new bank made $52,000. Now you know why people get pissed off.

If I had known about the auction and where it was held, I would have bought the house outright, I didn't find out about it until I talked to my new realtor.

zalinda

[NNN0LHI]

83. This is really self defeating at best

The lender is going to sell the house and the difference in what they get for the house and what the purchaser owes will still be owed by the purchaser. I don't think even bankruptcy helps now. They will still owe the money I think.

Basically if someone trashes a 200 thousand dollar house into a 50 thousand dollar house the former owner who trashed it will be responsible for the 150 thousand dollar difference. I think I have this right.

So it appears that these people are actually trashing themselves by doing this.

Don

[mdmc]

88. ya can't get blood from a stone

:kick:

[NNN0LHI]

89. But who would want to remain in a financial hole longer than they needed to?

I mean even if I hit the financial skids, which I very well could, my dream would still be to get back on my feet again financially some day if it were at all possible.

I would be attempting to minimize any needless future debt rather than increasing it if I could.

I never liked owing money to anyone.

Think my parents taught me that?

Don

[mdmc]

90. bankruptcy

wipes the slate and lets you trash the house.

But I agree it is self defeating

[renate]

91. what are the parents teaching their children when they do this?

I believe that most people who've been foreclosed on were well meaning people who aren't financially literate. They trusted that the banks wouldn't give them the loan if they weren't eligible, because that's the way it's always been until relatively recently. So I understand the anger and the heartbreak and the stress of the people whose lives have fallen apart because they owe more on their homes than they can pay or than the homes are worth.

But. A mature person does not behave like this and a good parent does not model this vengeful behavior. This is the kind of thing that kids do in kindergarten. I totally sympathize with the feelings that would lead people to trash their houses like this--but grown-ups don't act on every little impulse.

[ileus]

92. people who do this shoudn't have been given loans to begin with.

respect....something they will never have.