Totally Depressing

I found this article on foreclosed homeowners vindictively trashing houses now owned by the bank to be really depressing.  An example quote:

Myra Beams, a realtor in Tamarac, Fla., said half of her foreclosed properties, regardless of the price range, have been vandalized by the former owners. "I think the former owners are angry, and for some reason, they think they're entitled to destroy properties," said Beams. "I guess they're angry at the banks for giving them the mortgage."

There is a lot more like that.  A couple of quick thoughts

  • The sense of entitlement here is stunning.  It is these homeowners, not the bank, that failed to fulfill their end of the bargain.  Who is the guilty party here, anyway?
  • These folks are lucky to live in the US -- we have the most lenient home mortgage system in the world.  Very, very few other countries in the world have no-recourse mortgages where one can walk away only with a ding on their credit record, without even a personal bankruptcy.  Almost anyplace else, they would be facing years of garnishments for whatever losses on the loan the bank had after they sold the home.
  • I always thought the critique of lower income people "trashing" housing projects in the 70s and 80s had a vaguely racial tone to them, as if this were somehow a proof of African-Americans being shiftless and irresponsible.   But here we have white middle class people actively trashing their homes.  Proving once again that being an inconsiderate jerk is truly a multi-racial, multi-ethinic behavior.


  1. Matthew Slyfield:

    I have a few comments.

    The section you quote is not original to the article you link to but is a quote from an ABC news article from 2010.

    The linked article quotes several articles, the most recent is from 2011 and the oldest from 2008. I wouldn't consider the linked article representative of the current state of the foreclosed homes market.

    None of the articles quoted in the linked article include any actual evidence that the damage was done by the prior home owners. Several specifically mention squatters and/or third party vandals.

  2. nnu-16121:

    I've a few thoughts, not all of which are wonderful:

    If I were to walk way from my house today, it might make that sort of list of disasters. Not because I intended destruction, but because one must pull up the dangerously heaved brick paver walk to replace it with concrete, and one must get access to walls that you anticipate moving in order to plan the relocation of the pipes and romex running through them, etc. Much of the damage described could be unfinished DIY projects or because contractors walked off the job when the money ran out.

    If I were to walk away from my house, I would still be on the hook for the difference between what the bank could get by selling the forclosure and what I still owe. I refinanced, you see. My mortage broker encouraged me to do so and persuaded me of the sense in doing so, but did not dwell on that fact that the refinance changed it from a non-recourse mortgage. If you look at city-data for Tamarac, you see that between 2000 and 2009 median income went up by 11%, but median house prices increased by nearly 80%. I suspect many at the lower end of the income scale would have taken advantage of their equity and taken cash out in a refinance, in which case the loan might be recourse, and the IRS might want tax on the "income" if any deficit is forgiven. I wonder if people are surprised when such damage hits them directly in the pocketbook, when they thought they were free...

  3. obloodyhell:

    }}} Who is the guilty party here, anyway?

    Clearly, by definition, it's the eeeevil corporate banks. This seems rather duh.

  4. obloodyhell:

    }}} I suspect many at the lower end of the income scale would have taken advantage of their equity and taken cash out in a refinance

    People who take out loans on equity without a purpose for the money that is expected to be income-generating, or at least used solely to make repairs or fiscally sound improvements to their home practically deserve to lose their home. If you did it to buy a boat, a newer car, etc., then you're an idiot.

    That's pretty much what I'd say to their faces. I'd be more polite in terminology but there's no tap dancing around it.

  5. marque2:

    No,having shopped for houses recently and seen some of these home it is quite obvious when one has been trashed. It wasn't unfinished projects
    (Who would start a renovation when they are a year behind on the payments. The holes are inexact - pinched though - any metal is missing including drawer handles. The toilets are frequently missing. Dishwashers are missing or damaged beyond repair. Maybe you are being facetious - but it is quite obvious there was I'll intent or someone basically stealing what they can.

    These guys should be prosecuted for vandelism
    and theft,but it would cost the banks too much to do that.

    Note, you might technically be on the hook for the difference but for practical purposes the loan is just written off. And in non-recourse states the bank. can't go after your other assets anyway.

  6. marque2:

    Something to note, not all loans are non recourse. It depends on state law. CA all home loans are this way, but in Iowa, for instance, the bank can go after other assets, bit for practical purposes they usually don't.

    You can also contractually get nonrecourse loans bit the interest but the interest rate is about one point higher. The types of loans are needed to purchase properties in a self directed IRA.

  7. bigmaq1980:

    Can we expect anything different?

    We have banks and corporations that get "bailed out" from self-inflicted wounds, so our government has set something of an "expectation".

    On top of that we have a government that demonizes profit making corporations, and particularly banks (though the issue is really cronyism, to which the government is a party).

    What we call "poor" in America is a level of economic status that the vast majority of the world aspires to. This fact has long been forgotten, especially with the media imagery/messaging where we've become accustomed to comparing ourselves to millionaire lifestyles, then, with the encouragement of the divide and conquer politics, get wrapped around the axle about how "unfair" it is.

    No, very sad and disturbing, but not surprising.

  8. Dick Gillette:

    Great comparison of today's "trashers" with those of the housing projects. Thanks for reminding us that we are more alike than some of us like to think.

  9. Rich R:

    Several years ago, my wife and I were home shopping and were absolutely shocked at the foreclosure properties the realtor showed us. This was in an upscale suburb of San Diego; properties priced between 600K and 1 million. Pools full of green pond water, holes in walls, doors missing, light fixtures torn out of the ceilings...unbelievable.

  10. Ted Rado:

    In the old days, one only bought what one could afford. The banks, in turn, reinforced this idea by not loaning anyone money they could not afford to pay back. Then, enter our glorious government. Buying things that one cannot afford is an entitlement. Twist the bankers' arms, create agencies to buy bad mortgages, etc. Then, when the poo-poo predictably hits the fan, the government blames the bankers. Government action is behind virtually all the bad things going on in our economy. We are entitled to what we earn. If you want more, train for a better job, get a second job, or whatever. The modern idea is that all this effort can be circumvented by voting for gimme politicians. What BS!!!

  11. marque2:

    These folks are not as dumb as you think. First they got a 100% loan on the property because they were "poor" then they stopped paying the loan - living in the place for free for about 18 months, then when the bank was ready to throw them out, they took all the copper, toilets, and handles out and sold them for metal scrap, getting even more money.

    Meanwhile the defaulted loan, gets picked up with a government bailout, so the rest of us cover it. It is basically another form of welfare.

  12. irandom:

    I was watching some house buying show on Discovery and some people truly intentionally trashed things. I can understand leaving trash, but punching a hole in a large bath tub. I just hope people don't realize that even new cars go down in value and start walking away from them or intentionally crashing them.