Stripping foreclosed homes

[thrifty]

The local news just did a story on this...

Apparently when people's homes are foreclosed they begin selling whatever they possibly can out of the home. That's everything from appliances, to toilets and bathtubs, to wall outlets, to cabinets, to furnaces, etc etc.

The banks are getting the keys to the houses and it is literally empty of everything.

The argument given was that the bank gave her this outrageous loan so she has every right to start selling things when she can't pay said loan.

Thoughts?

[BroomJockey]

Appliances, sure, I can see that.

The rest? Unless they added it, that's low. The house was supposed to be valued at something, which included the value of the fixtures. Depending on how long they were there, and how much they've defaulted on, they've already taken the bank for a ride, now the bank's going to spend more money to get the house back to liveable condition. Banks could probably go after them for the value of the sales. Can't say I'm terribly surprised though. Another random sample of customer entitlement.

[joe hx]

People have done this for a long time. They strip the house not only to get some extra cash, but also to damage the house to get back at the banks. Essentially the house occupants view that the house is theirs, and that "foreclosure" means the bank is stealing the house from them.

Same thing happens with cars. When someone's car gets repossessed, they'll often damage the car, like putting sugar in the gas tank and water in the engine (where the oil goes).

[tabbyblack13]

I can see that do that to appliances but to take the showers, wires, pipes, outlets, and other items. That is damaging the house and the next buyer will have to pay for it all. This also lowers the value of the house and the neighboring houses too. I know that the banks can be assholes and will do some mean things to people that are honest. But sinking to there level will not work.

People forget that they bought the house and got the loan. I know that there were some very unethical loan officers that got these loans, but you are the one who signed it.

[LewisLegion]

While out househunting I saw several houses that had been purposefully vandalized because they were foreclosed on. What the sellers don't realize is it really doesn't hurt the bank. The bank wants only whatever is left on the loan to be paid off. Usually they can get that because the remaining loan amount is below even low market value. Sometimes they can't, sometimes they can get over that...it all ends up balancing out usually.

Unless the bank ends up sitting on the property for a year or more it usually gets what's coming to it, from my understanding (which may be terribly flawed). But now the BUYER...random, innocent strangers who never did anything to the seller...is the one having to pay out of pocket to fix all the damage. In my opinion, trashing a house you couldn't afford and ended up losing...whether the loss was your fault or out of your control...is the HEIGHT of immaturity. It's the adult equivalent of a little kid throwing his toys because he doesn't think the other kid 'played fair'.

[MaseMan]

At that point it's vandalizing someone else's property. I think people have a tendency to blame others for their mistakes, and this speaks to that. No one forced these people into taking a bad loan.

[Pedersen]

At that point it's vandalizing someone else's property.

Technically, no, it's not. When you buy a home using a mortgage, the bank gives you money for you to complete the purchase. Your name goes on the deed. It is, legally speaking, your home, not the bank's. The other thing that happens is that the bank puts a lien on the property. As long as you make the payments, the bank does not take any action based on that lien.

When you stop making the payments, the bank chooses to exercise its options, and foreclose on the home. When the judge signs the final bits of paperwork, the bank becomes the new owner of the property. Until that time, you are still the owner. Once the bank becomes the owner, the sheriff comes along, kicks you out, and locks up the place.

As such, you can not possibly have been vandalizing someone else's property. You owned the property that you were destroyed.

Minor bit, but legally speaking, it's the difference between "this is shitty behavior" and "spend some time in prison behavior."

What the bank has the option of doing, most likely, is going after the former homeowner. I know that in my mortgage it explicitly states that I may not do anything to reduce the value of the home. I'd say that stripping the home qualifies, and if the bank is unable to recoup its losses from the property sale, they would have every recourse to go after the former homeowner for the remainder (assuming that all mortgages have such a line item)

[Bright Star]

The local news just did a story on this...

Apparently when people's homes are foreclosed they begin selling whatever they possibly can out of the home. That's everything from appliances, to toilets and bathtubs, to wall outlets, to cabinets, to furnaces, etc etc.

The banks are getting the keys to the houses and it is literally empty of everything.

The argument given was that the bank gave her this outrageous loan so she has every right to start selling things when she can't pay said loan.

Thoughts?

Well, if the bank gave her this outrageous loan then she should have known not to buy it in the first place if she knew she couldn't afford to make the payments. It's not like the bank put a gun to her head & forced her to buy the house.
Stripping the house of everything that you know doesn't belong to you is nothing short of robbery.

[DrFaroohk]

I used to work for a real estate attorney and we occasionally had a client wanting to sell his property so the wife couldn't get it in the divorce. Even though it's still technically his, it was not legal for him to do so and if he were to sell it, the court would just take it back and give it to the wife anyway. I would assume a similar principle applies here with the vandalism.

Plus what people don't realize is they are only screwing themselves. If you owe 30,000 on a house, and you strip it down to crap, and the bank sells it for only 20,000 because of that, you still owe for that extra 10 grand.

As for people's responsibility, you can't necessarily blame people for buying a house they can't afford. I have no idea how long a house loan goes for but its longer than a car - you can't even forsee what's going to happen 3 years down the road, let alone 10 or 20. Shit beyond anyone's control can happen. It doesn't excuse vandalism, but still.

A question, for those who are knowledgable, since I am not: Can a bank simply say "We're taking the home" even though you're making your regular payments on time? And what would happen if the bank you got the loan from went out of business? You can't pay a debt to a nonexistant bank.

[BroomJockey]

A question, for those who are knowledgable, since I am not: Can a bank simply say "We're taking the home" even though you're making your regular payments on time? And what would happen if the bank you got the loan from went out of business? You can't pay a debt to a nonexistant bank.

Question the first: Unlikely. What they might be able to do is call the full loan due, and when you can't pay, then they take the house.

Question the second: If the bank went out of business, any outstanding loans would be sold, either to other banks, or to debt collection businesses, or some other institution.

[taxguykarl]

This has been going on with rentals as well. My dad had to take a sucky former tenant to small-claims court for making off with the fixtures--right down to switch plates--in an apartment he owned. He prevailed, but never did collect on the judgement. I can't say I blame him for getting out of that business.

[lordlundar]

Question the second: If the bank went out of business, any outstanding loans would be sold, either to other banks, or to debt collection businesses, or some other institution.

As an example, when Fanny May had to declare bankruptcy, all the loans they had were being picked up by other banks.