Now Banks Are Also Walking Away From Foreclosures, Just Leaving Them To Rot

It’s not just underwater homeowners just flat out walking away from their houses. Now some mortgage servicers, having decided certain properties would be too expensive to try to foreclose, secure, maintain and market, are just abandoning the properties entirely, to let nature, and whatever else, take its course.

More banks walking away from homes, adding to housing crisis [Chicago Tribune]

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  1. seamer says:

    Could it help the economy if the houses were returned to the owners with a highly reduced, or zeroed, mortgage?

    • Nogard13 says:

      Exactly! Why bother foreclosing if you’re just going to abandon the property? Might as well try to get as much as you can from whomever took out the mortgage.

      • c!tizen says:

        I think we’ve all learned from this that banks/bankers aren’t brightest bulbs in the box.

        • seamer says:

          Well, I was just thinking that the money previously (un)spent on a mortgage could enter the market in other ways, like buying food or luxuries and stuff. That would surely drive the economy.

      • Red Cat Linux says:

        I think they have to. If the rest of us paying our mortgages get wind of the fact that you can stop paying and continue to live in the property, the rest of the herd will bolt.

        It’s like heads on pikes in the courtyard. You aren’t really punishing the dead guy so much as freaking out everyone that passes by and see his head.

        • tbax929 says:

          I get your point, but I wouldn’t say that all of us would stop paying. Some of us actually take pride in living up to our responsibilities.

          Of course, we’re not the same fools who took out loans we couldn’t afford anyway…

          • YokoOhNo says:

            or ran into a medical emergency, lost his/her job, had a death in the family or otherwise just living the good life while laughing at all those people going to work everyday!

      • YokoOhNo says:

        Long answer:
        the servicers and banks make more money by foreclosing on a property then letting someone live there. foreclosure makes banks more money than a loan modification

        Short answer: profit

    • mergatroy6 says:

      Only if the banks reduce my mortgage by the same percentage.

    • ARP says:

      If Fannie insured them, they can abandon them and make a claim. I’m not sure of the rules about trying to sell, etc.

    • hansolo247 says:

      Who is the owner?

      The person who bought it but failed to pay for it?

      The entity that really owned it but gave up ownership rights?

      The local government?

      Really, the true owner is whoever held the mortgage. If they abandon it, they have the sole decision as to ownership. If they cede it, the first one to claim it and pay the tax is the owner, I guess.

      • sonneillon says:

        this is exactly the thing that adverse possession was made for.

        • fantomesq says:

          Would you invest several hundred thousand without title to the property? Very risky!

          • sonneillon says:

            No, but I’d change the door and fix the lock and call that an improvement. You don’t have to make huge improvements, just enough so you can say I improved this property.

            • OutPastPluto says:

              It looks like you could do limited demolitions and it would still be an improvement on the current state of the property.

    • Rachacha says:

      Depends. The house next to us is in sort of a state of limbo. The original owner tried to take advantage of the real estate bubble in Florida and bought several investment properties, turning his former primary residence (next to us) into a rental. The renters left and the bubble burst so the house went into foreclosure when the owner was left with 5 homes and no renters. Unfortunately, after the bank siezed the property, they never sent anyone over to winterize the house, so with no heat in the winter, the fire sprinkler pipes (required in single family homes per local code) burst, flooding the first and second floor and basement. That was about 3 years ago and the house still sits with water logged carpeting, drywall and insulation. The hardwood floors are warped, the drywall is moldy, and I am sure that the subfloor has suffered structural fatigue because of the water damage and neglect. From what I understand, the property ownership is in question because paperwork was not filed properly, and the original owner does not want it.

      To return the house to a livable state would require gutting it and a complete scrubbing to remove all traces of mold as well as replacing many structural members. In the end, it would probably be easier to tear down the house and start over again, which is sad, because the house is only about 10 years old.

  2. SomeWhiteGuy says:

    I don’t think that’s completely legal in some states. I know in Louisiana there are state laws that don’t allow properties to be completely abandoned. Since the banks would be the ones that own the property they would be liable for all upkeep of the property and any fines levied for letting the place go to crap.

    • mdoneil says:

      That is why the banks don’t foreclose. If they took title to the property the would be liable for the code enforcement actions, fines from the city or county for not mowing the lawn, letting the pool turn green and become a breeding ground for bugs, paying the taxes, securing it so no one injures themselves, and many more expenses.

      It is cheaper for the banks to simply take the hit on the mortgage than to foreclose and incur those bills so they leave it alone and the person who took out the mortgage still owns it.

      It is all a matter of what is financially advantageous.

      • Me - now with more humidity says:

        Correct. And odds are the municipality will take it at some point for back property taxes.

        Detroit must own an insane amount of property. Taxes were nice and low which attracted investors, but the second an investor bought a property, the taxes jumped to $300 to $400 a month, killing any possibility of cashflow on rents or $650-$850 — even if you got the house for $10,000.

        • Hitchcock says:

          According to a documentary I saw, what’s hurt Detroit is the record keeping was so bad, Detroit has no idea who the owners of the property are/were, so they can’t file the necessary paperwork to take possession legally.

          • Me - now with more humidity says:

            Wouldn’t surprise me. They weren’t prepared for the huge influx of investors during the boom. And most were from out of state.

  3. SBR249 says:
  4. SomeWhiteGuy says:

    Also, the link in the article goes to the Chicago Tribune 404 page.

  5. suez says:

    Maybe THIS is what happened to the Peublos and other ancient civilizations that suddenly disappeared?!

  6. Loias supports harsher punishments against corporations says:

    Does this include homes with HOA fees? Because then leins will be placed on the properties. No one is going to buy an abandoned property, completely unkept, for anywhere near an appropriate sales price when there is a lien for thousands of dollars.

  7. HoneyB says:

    i dunno, why don’t we let the people you flippin’ foreclosed on LIVE IN THEM AND MAINTAIN THEM! freaking goodness

    • hansolo247 says:

      Or how about you let the highest bidder live in them?

      The people foreclosed on didn’t pay for it…hence the foreclosure.

      Just move on to the next individual who will pay a dollar more and auction it from there.

      • Master Medic: Now with more Haldol says:

        That s a problem as people are refusing to pay more. In my Phoenix neighborhood a home 3 up from my old one is listed for $89,900. The original price was 110,000. People can’t/won’t afford most properties these days.

        • Mom says:

          A house in Phoenix that was priced at $110k at the market peak is worth considerably less than $90k now. That doesn’t mean that it will never sell, just that the price is currently too high.

          • Master Medic: Now with more Haldol says:

            Not at peak, that was a new build price in 1998. Peak it topped out around $290k.

            I agree that these homes have yet to bottom out, but there in lies the problem; how to get people into these homes before they become Detroit part deux?

    • Erika'sPowerMinute says:

      Well sheee-it, if that’s the plan I’ll just go ahead and stop paying my mortgage, get foreclosed on, then continue to live in it. I could have a lot of fun with $1670 a month!

      • evilcharity says:

        I think the catch with this logic is that if your house is actually worth something near the remainder of your mortgage, the bank WILL foreclose on you. If you live in a house that has wildly depreciated since you bought it (or has fallen into disrepair) and the bank doesn’t want to touch it, then I could see how it might make sense to let the occupants stay in the home and perhaps reduce the principle of their loan.

    • madanthony says:

      I suspect that at least some of these houses were neither lived in nor maintained – that either the mortgagee moved out or that they were bought as investment properties or to flip and abandoned when the “owner” realized they would not make any money.

    • TouchMyMonkey says:

      Because that would be being nice, and banksters are notorious for being total dicks.

  8. qwickone says:

    Can people just squat there long enough that they get ownership rights? I know squatting laws vary by state, but could this become a problem? Or is it a good thing?

    • EarlNowak says:

      Generally you have to live there more than 20 years to get legal title by adverse possession. But it’s possible.

      • Michaela says:

        Turn on the electricity in the place and just start living there. It can take ages and tons of court fees for anyone to get you out (reference: How Stuff Work’s Stuff You Should Know Podcast on Squatting)

      • cloudedknife says:

        open and notorious, hostile and adverse, for the statutory period.

        I imagine the hostile part would be a problem if the bank is actually happy someone is maintaining the property. Imagine if after a year the bank mailed the residence a letter saying “to current occupant, thanks.” then after 18years the bank came in and said “hey that’s our house, get out!” they could then argue that only then does the statutory period begin to run since (they would argue) the occupation was permissive and therefore not hostile. They’d probably lose but who knows?

  9. Warren - aka The Piddler on the Roof says:

    Welcome to Third World America!

  10. consumerd says:

    Might be worth keeping an eye on the local tax auctions in your area… your next house might be only $10,000 (back taxes) and you own the title and the deed!

    Then just wait it out, sell it for the inflated price then and cash out.

  11. Oranges w/ Cheese says:

    In many cases, the houses couldn’t be lived in as sold anyway – why buy a condemned property?

    On the other hand, its AMAZING how swiftly our things decay without human intervention.

    • Red Cat Linux says:

      Condemned properties get bought all the time.

      I walked through my neighborhood a few years back and found a house that had fallen into disrepair. The roof had not been maintained, there was water damage, then an electrical fire. It was condemned.

      It was also in a good neighborhood and sold cheap. I’d be hard pressed to pick out which house it was now.

    • DocOtter says:

      How quickly our made to be cheap and easy stuff decays. The Romans had better concrete than us – we just use cheaper stuff and shore it up with rebar mostly. Just as a singular example, but I admit its hard to find a piece of functional architecture a thousand or more years after its construction, except for Roman stuff. In fact, most of the Roman destruction is due to looters stealing the stone blocks to build their own crappy projects, so……

      • Loias supports harsher punishments against corporations says:

        In planetary terms, all of society, literally, crubles very quickly. Most collapse within 100 years. The initial source of outside inserection? The chimney. The joints connecting the shimney to the shingles gives, leaking rain into the home, eventually compromising the entire foundation.

      • Applekid ┬──┬ ノ( ã‚œ-゜ノ) says:

        Entropy says that everything will eventually decay. Why build it to last a thousand years when it’ll be sand in a million… same kind of sand as if it was built to last a hundred years.

        I was going to say this meant that the Romans were stupid, but I think I just made myself depressed. :(

    • Rachacha says:

      Depends on which area of the country you are in. In the DC area, many small old homes(1940s with 600sf) are being torn down and new homes/developments being built. People were paying for the land because areas near the city had been developed with smaller homes that were not desirable anymore. People wanted to live near the city, so they built a new home in an old neighborhood because it was the only land available.

      In other parts of the country, a condemed property may not be desirable because there are acres of undeveloped land surrounding it where new homes can be built.

  12. CounterFriction says:

    It’s going to be hilarious when any municipality, HOA, etc. tries to collect for any sort of maintenance issue or zoning violation and the Bank turns around and claims there is no way to prove who the actual owner of the home is because the paperwork is so screwed up…while at the same time the Banks are foreclosing left and right claiming under oath that they have valid right to another property with the same jacked up paperwork.

    • Loias supports harsher punishments against corporations says:

      If the bank could/would not claim it, perhaps the HOA can claim the property in court (if no one objects, then they are the owner).

  13. Red Cat Linux says:

    Quick – somebody call that guy who was squatting in foreclosed houses claiming he owned them!

  14. keepher says:

    Something similar happened near me. The bank tried to give it to our town, the town said no thanks.

  15. Kibit says:
    • Kibit says:

      I thought I checked to see if anyone else had a broken link in posted a new on. I guess I missed where someone else did it. :)

  16. Larraque eats babies says:

    I’m really confused now.

    If I have a car – full ownership – that I no longer want, I can’t just abandon it on the side of the highway (or drive it deep into the woods) and ‘let nature take its course’. There are rules and guidelines on how to dispose of these things.

    If the bank forecloses on a property, are they not responsible for all proper maintenance and upkeep (or demolition) of a property?

    Or as a bank are they considered ‘too big to be bothered cleaning up after their shit’?

    • ipsedixit says:

      The key is that they don’t complete the foreclosure. I think Illinois law is similar to wisconsin–you can get as far as a sheriff’s sale but then never confirm that sale with the court. title never transfers, and the homeowner, who’s probably moved out already because their house just went to sheriff’s sale, is still the title holder.

      of course, i’ve also seen a case where the bank went back and revoked the confirmed sheriff’s sale and withdrew the deed they filed. all without telling the former homeowner. the old lady lady later ended up with a warrant for her arrest for not paying building code violations on a house she thought the bank owned.

      • Firethorn says:

        Ouch. Assuming you kept all the paperwork about the forclosure, could you get out of such stuff by pointing out that, for all you knew, the bank forclosed, and fining the bank is likely to get you a whole lot more money than fining me?

    • u1itn0w2day says:

      This is confusing me as well. I think the banks: the last known owner or owner of record should be held accountable even if for nothing but a demolition/disposal fee. But these cities will muck that up by fighting them for back taxes and fines. I would just make the last official owner pay for the demolition/disposal of debris.

      I think the banks seem to be confusing ‘accounting’ with ‘legal’. They wrote the loan off the books but that property should be technically still theirs unless they have documentation of selling or giving it away(the house and NOT the loan which should be two different things)

    • Me - now with more humidity says:

      Only if they take title.

      • u1itn0w2day says:

        as in take title away from the borrower/buyer?

        The article mentions that since there’s still a lien on these properties the borrower still might be liable?

        • Me - now with more humidity says:

          The lien has to be satisfied before title can transfer, IIRC.

          • Me - now with more humidity says:

            Duh — finish the thought, Me. But they’re not going to come after the titleholder for it. That’s probably how they got the lien in the first place. They have staked their claim.

    • Saltpork says:

      Actually you can drive it into the woods. As long as no one develops near it or stumbles upon it it there’s not much that can be done.
      I’d get rid of the VIN though just in case & drain the gas out as well.

      The point is that you can just leave things to rot. The bigger or more disjointed the system, the easier it is to find & exploit these loopholes.

      The little example above seems to be what the banks are doing.
      “That’s not our car, we can’t find the title.”

  17. Master Medic: Now with more Haldol says:

    Proving yet again that people need to adopt the same business attitude as the corporations. Screw “doing the moral” thing.

    • cloudedknife says:

      honoring debts is a moral thing.

      mortgage debt is securitized. Therefore, accepting foreclosure as the natural consequence of not paying your mortgage is a perfectly moral thing to do. If the bank takes a year to get around to actually exercising their rights, that’s their problem not yours.

      • Master Medic: Now with more Haldol says:

        Then tell me how to impart morality upon a corporation?

        • TheSpatulaOfLove says:

          Somebody thought it was a good idea to give corporations all that voting power – maybe they thought it would bring out the morality in corporations?

          Nahh…

      • Me - now with more humidity says:

        It’s not a moral issue. It’s a contract issue. Read the contract. Each side is exercising the remedy it proscribes: If I can’t pay, you take the property. Get off your high horse and take a ride through the real world.

        • cloudedknife says:

          ah, maybe I should have put some sort of emoticon in my post. I just said what you said, but in a way that makes it “moral” for those who are still stuck in that morality fallacy that comes with a home mortgage.

          it isn’t quite sarcasm, but it is still subversive and motivated by a dark sense of humor.

      • Awesome McAwesomeness says:

        According to the Bible, it’s immoral to charge interest as well.

  18. Loias supports harsher punishments against corporations says:

    Find one of these properties, pay the annual property tax to the city and nothing more. The stay as long as no one stops you. Save up some money to buy a home later on.

  19. SPOON - now with Forkin attitude says:

    wow. I wonder how you’d buy something like that?

  20. Kibit says:

    If they are going to just abandon the house then why don’t they work out a deal with the homeowner?

    It sounds like the former homeowners can still have problems after they are evicted and the house abandoned.

    “The whole concept of charging off creates this limbo land,” said Dan Lindsey, an attorney at the Legal Assistance Foundation of Metropolitan Chicago. “There’s still a lien that can follow the borrower.”

    • Me - now with more humidity says:

      And if you really want to confuse the issue, have the owner be discharged in bankruptcy. They no longer have a mortgage. The bank has to take title via foreclosure, or the title stays with the person who has been discharged.

  21. DeadFlorist says:

    What surprises me about this story is not that the banks are abandoning the houses in Chicago’s shootiest neighborhoods, it’s that they issued mortgages on them in the first place. What the hell is fair market value when half the block is rubble-strewn vacant lot and half the standing houses are already abandoned, even during the height of the bubble? Isn’t there some minimum of how far north of zero it has to get before it becomes mortgageable?

    • Kate says:

      LOL, look someone stumbled on one of the main reasons for the housing bubble – the banks took the crappy mortgages gave them a A+ rating and sold them off to multiple investors because supposedly if the mortgage was owned by lots of different people, suddenly it was a good loan.

      The banks made huge amounts of money doing this. Now we all have to deal with the fall out.

      • LadyTL says:

        You know there used to be laws to stop banks from doing this. That’s why it only happened recently (in historical terms).

    • ipsedixit says:

      they probably lied about income and the appraisal on the mortgage app too… these weren’t loans designed to last 30 years, they were loans designed to feed the ABS market.

  22. The Twilight Clone says:

    I bet there’s some tax break for what the banks are doing. Some financial gain anyway.

    Plus if they just let people keep the house and not foreclose, then everyone else will want to do that

    Hey, the guy next door stopped paying and they didn’t kick him out . . . maybe I’ll try that.

  23. ipsedixit says:

    In Milwaukee, there are dozens of cases where the homeowner moves out, but fails to realize the bank walked away from the foreclosure. They end up getting charged with tons of building code violations by the city. Often, they don’t have the cash to pay the fees or fix the house. City muni court fines are backed by bench warrants and jail time–these walk aways end up with poor people going to jail.

  24. cspschofield says:

    Would these properties qualify as abandoned? Could they be claimed by some form of squatting? it seems to me that this is getting interesting!

  25. Torchwood says:

    “In Chicago, the mortgage servicers and trustees most often associated with the properties flagged by Woodstock are Bank of America, with 314 properties; Wells Fargo (234); U.S. Bank (185); Deutsche Bank (178); and JPMorgan Chase (165).”

    Say, wasn’t BoA and Wells Farto part of last years “worst business contest”? I know that BoA had plenty of stories of fouled-up handling of mortgages.

  26. EverCynicalTHX says:

    Obviously this only happens when deadbeats let a house fall apart (while living mortgage free) duing the extended foreclosure process. Assuming someone lost there job, the least they could do is perform basic maintenance since they are home 24/7.

    Strangely though if the banks decide it’s not worth the cost to fix all the problems the deadbeats caused it’s bad and unfair according to some here.

    I say bring on the bulldozers…and the hypocrisy is very strong here btw.

    • Me - now with more humidity says:

      Riiiiight. ‘Cause if you can’t pay the mortgage, you surely can pay the upkeep on something you’re going to lose anyway.

      The self-righteous indignation — not backed up by a grasp on reality — is strong here.

      • EverCynicalTHX says:

        Yeah, yeah, yeah – we’re not talking about replacing roofs or HVAC systems here.

        Have you ever spent time looking at foreclosure properties? Most of the damage could have easily been avoided with a little elbow grease and a few dollars worth of materials. It’s one thing to live mortgage free for an extended period of time…wish I didn’t have a mortgage – people should be grateful for that and at least be a damn human about the place where they live, if nothing else for the neighbor’s sake.

        • Me - now with more humidity says:

          I have bought several. Most of the damage is caused by anger.

        • wildgift says:

          People who squat fix up their properties at least enough to keep them habitable. If there’s a leak, a tarp is installed on the roof. If a window breaks, it’s fixed.

          It’s cheaper to keep a place repaired and habitable than it is to pay rent.

    • Daniellethm says:

      It seems to me that the homeowners don’t know that their name is still on the title of the property. Essentially the banks come in and say “GTFO, we’re foreclosing on you” and the homeowner leaves. The bank then puts the brake on the foreclosure process(Article states some homes have been in the process for 18 months), because it would cost them more money to do something with the property (Upkeep and other costs associated with returning it to market, or demolishing the place) than they could make off it.

      These people probably don’t realize this and think the bank has taken possession of the property, because that’s what they were told. Nobody’s going to continue upkeep on a property they’ve been led to believe no longer belongs to them (Obviously it didn’t really belong to them yet if they had a mortgage, but I digress).

    • wildgift says:

      A lot of properties that aren’t up to code, and difficult to sell, are habitable. They might need some work, or something was added illegally, but they can provide shelter. The only issue is that they can’t really be bought or sold — because to protect the average buyer, and to prevent rip-offs, the house market is regulated. These regulations are good, because they create the market. They create conditions where people trust the market to deliver them what they want.

      Some municipalities have added loopholes to allow people to take ownership of a property by squatting for several years. This is a kind of recognition that the regulated market doesn’t satisfy all conditions. There are situations where properties can’t compete in the market, and rather than destroy usable houses that can’t be sold within a regulated market, they can be taken via other means. Look up “adverse possession.”

  27. NumberSix says:

    I’m pretty sure that’s illegal.

  28. FrugalFreak says:

    hmmm wonder where these homes are. good way to claim ownership if they don’t contest.

  29. FrugalFreak says:

    If nothing else, sell these homes to rent to own homebuyers or other disadvantaged folks who would pay taxes, improve and have possible future housing.

  30. Caffinehog says:

    Time for a new homestead act… Banks declare that they are not pursuing foreclosure. The previous owners have 1 year to respond. If nobody responds, whoever fixes it up and lives there for two years owns it.

  31. quail says:

    One of the biggest issues with all of this is that many of the mortgage companies that do take possession are not paying the house taxes to the cities in which they are located. (At least that was the case for the last two years.) Not only are they sitting empty & decaying, bringing down house prices for their neighbors even more, but they’re also not paying their fair share to the school districts and other government agencies.

    Soon there’s going to be a back log of properties for sale by the government to take care of the back taxes.

  32. wildgift says:

    In NYC, back before the Lower East Side got gentrified, people squatted in abandoned properties. They moved in and fighted to keep it. They used legal remedies to take ownership of these apartment buildings. These were mostly middle class punks, young adults, but also community folks in need. Look up “squat or rot”.

  33. danic512 says:

    Two things that would take care of this issue:

    1. Make a system that allows for foreclosed owners to rent the property until it can be sold.

    2. Tax the heck out of unoccupied properties.

    • Papa Bear says:

      That already exists. The mortgage company, as owner, can agree to allow the house to be rented by the current occupant. Since the mortgage company owns the house, it can do what it pleases. All that it must do is satisfy the past due of the mortgage, the purpose of the sale. That is done to protect the home owner. If the past due remains unsatisfied, the home owner is still responsible for it and can be sued. However, many states have laws that if the sale does not satisfy the past due, the home owner is not liable. Also, that the mortgage company must make every reasonable effort to satisfy through a sale or other means.

  34. Papa Bear says:

    Actually, if title has not transferred to the mortgage company, then the home owner has the right to posses the property. If it has, and the property is abandoned, the former home owner or any one else for that matter, has the right to occupy the property and live in it. It is known as adverse possession. As long as they live in it and maintain it without “waste” then after X number of years, it is legally theirs. Waste is diminishing the value of the property.

    The possession must be in the open, in other words and it must be known the occupant does not own the property. As long as the party with title does not protest, there is nothing that can be done. Property taxes could easily be paid as tax bills generally go to the address and “current resident” if there is no other address on file.

    There may be more to it than this, but if I were in need of a house or the former owner, I would sure look into it. Especially as the former owner because if the mortgage company has not registered the deed, the former owner is still the owner.

    • greyfots says:

      isn’t this a case where if the title and deed owners protest withing a certain given time and even if the squat-er is maintaining the house the prostestor can take it away just because they are the title owners,
      so lets say that u have 2 years to live in it and the title owner protests about in 1.8 years they are able to take it away right?

  35. Papa Bear says:

    On another note, if you are foreclosed on, regardless of the property, it is yours until title transfers. So if it happens and title did not transfer and was not registered at the registrar of deeds, don’t move. Sheriff can’t even force you out unless title has been surrendered and legally transferred. Go to all court dates without fail. If you are ordered to transfer title, that transfer is not complete until registered with the registrar of deeds. As soon as you get the order to evacuate, you go to the county registrar of deeds and see if title has been registered. If not, you don’t have to move and can get an order from the court to that effect. Check your state laws to verify the process. May not be statutory law. May be case law. But it is still valid law.

  36. vicissitude says:

    Since I used to deal with bank properties, I know a bit about what goes on. First, it’s not just supposed ‘deadbeats’. It’s everyone from families that have fallen apart, to families that have a death, or major medical problems with no support system. I’ve taken homes from Grandmothers and had to face small children who’s parents where not home. Also developers loose properties all the time, usually in bunches, but sometimes just a single home. Banks will abandon, or sell, or even trade mortgage paper for cheaper than what was owed on the original note. If they don’t think a property is salelable, they will dump it, regardless of the condition it is in. Lending will repossess a home regardless of what is owned on it. One example I can clearly remember out of maybe hundreds, was a $200K Palm Springs, Ca home that was repossessed for $10k. But then it gets better, the homes are resold for full market value. Yes, it’s legal, no it’s not moral. Since the individual States have been eliminating laws and oversight, resulting in banks pretty much being able to do what they want. Since funding for State lawmakers and oversight is being eliminated, local law makers have little money to sue.. The system is being played and I figure we’ll all be eating Chinese from the mainland, (IF we survive the 2012 tea party election.) sometime soon. Here kitty… Kitty… Kitty…

    • YokoOhNo says:

      Don’t you mean “public funding” for lawmakers?

      Private funding of lawmakers is alive and well!! most lawmakers are the best money can buy!

  37. vicissitude says:

    Ooops… It’s “Owned” to owed… My bad.
    Also, for the record and for you supposed ‘hard ore, feel sorry for no – one’ types. I still regret first seeing one African American Grandmother who had to endure living in deplorable conditions that I will not post here. Second watching her walk away with a shopping cart with a few things in it and walk off with no where to go. It was one of the saddest things I’ve ever seen and ultimately one reason why I quit doing it. True… How banks can live with deconstructing America, is beyond me. Much of Corporate America IS Un-American and I am sorry for Americans that have lost their homes. I’d save every single one if I could.

  38. Jane_Gage says:

    Let’s give them to the animal hoarders on that sucky TV show.

  39. bananaboat says:

    Funny, I’ve heard of some locally where offers have been placed but the bank rejects since it doesn’t come close to covering their losses. Then they just leave the house to rot. I assume they believe in the future (2025?) the value will increase to pay off through a sale.

    Big business/corporate America thinking! At the same time, our wages continue to fall as free trade creates a normalized world wide wage.

  40. cecilsaxon says:

    Stupid- obviously these folks never should have been home owners and the over valued properties further detail the lack of competency of all parties involved.

  41. Papa Bear says:

    By law, the mortgage company has a fiduciary’s responsibility to make every reasonable effort to maximize the sale price. This is not to protect the mortgagor (borrower) but to protect the company and its shareholders.

    In general though any proceeds not needed to pay off the mortgage, cost of the foreclosure action and sale, and any legal encumbrances on the property, in most states go to the mortgagor, his assigns or his heirs. 59A C.J.S. § Mortgages 1328. This is true in all states except the three which allow for strict foreclosure (VT, CT, ME). There may be other statutory provisions in individual states, but for the most part, this how it works.

    The problem which occurred with many recent foreclosures is that even if the house was sold for more than fair market value, the value had declined so much that there was negative equity. The sale price did not pay off the mortgage. In such cases, there is no excess proceeds to be returned to the borrower. As a matter of fact. Many states allow for a deficiency judgment to be sought under those circumstances.

  42. greyfots says:

    Isn’t this what Michael Moore talked about?
    the thing in flint Michigan,
    where if the house was abandoned IF foreclosured the state would charge the banks and tell them to either upkeep it or give it away and most decisions were give it away then the city would demolish or give it to someone in need and they just needed to keep it alive and well that way they would keep thier houses and still have a populated area,
    Cuz really if more houses keep foreclosing they’re will be ghost towns and collar thieves just packing up more money just because they can so really i would like for some physical moral people to take this in mind and say ok ill make some deals and give them away to state city or who ever so they can reuse it instead of having homeless people walking around with us not having the power to do something we have enough problems of our own,
    but really we need some regulators some real regulators

  43. YokoOhNo says:

    Corporations should not be expected to care for a “neighborhood” at the expense of their shareholder’s value!!! Their only responsibility is to profit and anyone who thinks a bank is financially responsible for anything should go back to russia and continue to worship your leader, Marx, from there!!

    • FrugalFreak says:

      these days anything is looking up from capitalistic pigs destroying America.

      “When humans cease to be human, We shall be no longer and shall wither and die on the ground of coldness”-unknown

  44. newfenoix says:

    I find this very interesting. Banks refuse to work with homeowners, kick said owners out and foreclose on the property and then can’t sell it and then walk away from it. There only one word for this and that word is greed.

  45. _UsUrPeR_ says:

    When I was a kid living in the suburbs of Detroit, Devil’s Night was always a spectacle to behold. Oct 27th – Oct 30th was typically the succinct end to select blighted crack houses in area neighborhoods.

    Of course, innocent people were also hurt in the process, and arson is totally illegal. I’m just saying…