I guess the question, "Why are people behaving so poorly today as compared to the last two real estate crashes?", should be asked.

Is it, perhaps, reflecting society's overall lessening of personal accountability?

Breaking & entry into a foreclosed home to strip copper pipes is a crime & should be pursued. An owner taking cabinets out of a house before foreclosure is tough to prosecute.

/tricia

I'm surprised mortgages don't include provisions to make stripping a violation of the agreement, and allow penalties for it.

There are clauses in mortgages that cover such things, suburbanmd. The issue comes in trying to enforce those clauses. If an owner/borrower removes, say, $5K of cabinets, appliances, etc. the lender will ask, "How much in attorney fees to chase this guy & what are my odds of recovery?" It's a civil issue. Now, if a house has been foreclosed & is sitting empty & somebody breaks & enters...that's crimminal & will be prosecuted by law enforcement.

/t

Why do these clauses require legal action, when fines for other infractions (e.g. late payment) can be added to the borrower's account unilaterally?

Well, one reason is because value must be established for the items supposedly taken from the property.

If you read a mortgage you'll see that a lender can call the note due & immediately payable if the borrower fails to do all sorts of things...maintenance, insurance, taxes, make the note payments, etc. It does not, however, list every item appurtenant to the property & a corresponding value. The late penalties you refer to are established in the Promissory Note not the mortgage. The mortgage is a securitization document that includes remedies such as calling the Promissory Note due and/or foreclosure.

I have, on rare occassion, gone to Court & received an emergency injunction to stop a borrower from removing property . They were extreme situations & involved construction loans where thousands of dollars worth of materials were on-site but not yet installed. My borrowers were heading towards BK & were removing the uninstalled property (paid for by the bank thru the regular draw process). That type of property (not yet appurtenant to) is covered by the UCC (Uniform Commercial Code) documents that create a lien similar to a mortgage...at least for the purpose of this discussion.

In those cases, the judges issued injunctions against my borrowers. In theory, I could do the same thing with a borrower snatching snazzy door hardware but it costs the bank money for the attorney to file the injunction, attend the hearing with before/after pictures, receipts, & other evidence & follow-up with me after the hearing. As a lender, I'm not going to do that for a few thousand dollars of cabinets. Now, if a borrower is basically removing the house...board by board...in other words, an extreme case, that's another story & a lender will act.

/tricia

The lawyers ought to be able to come up with a clause that doesn't rely on establishing value. Something like, "If the house is left in uninhabitable condition due to missing or inoperable fixtures, you owe us the greater of $25,000 or the cost of returning it to habitable condition."

There was an article in last months "Time" (I think it was Time) telling about how banks have "Cash for Keys" programs where the bank will give the people being foreclosed on a cash incentive to NOT destroy the place. I was shockedÂ

LOL

suburbanmd, it doesn't sound like you've done many lender home inspections? By your mortgage clause a goodly number of mortgages would be getting hit with your fine! You'd be surprised at how many people live with "uninhabitable" & "inoperable fixtures" as a lifestyle choice. It's downright scary. :(

Anyway, unless there's a collectable deficiency judgment what good does it do?

Define "uninhabitable"? Would the missing $10K chandelier in the dining room that was replaced with a HD cheapo qualify? What if you were in the middle of a major remodel having already torn out the old kitchen cabinets, appliances, & flooring then lost your job; thus becoming delinquent on your mortgage payments? Would that qualify for your fine?

There's already enough clauses. The lender has ample remedies. The devil is always in the details...as in, collecting on those remedies. Decisions are bottom line oriented. If I can't collect, a mortgage clause or a judgment is worthless and that is the vast majority of cases. If a specific situation is different then the lender will make different decisions.

/tricia

Terriks, I guess if they stripped out the furnace, we better hope that thieves take the water pipes, too! Up here, a lot of basements will turn into swimming pools if no one turns off the water and empties the pipes before freezing weather comes.

We have a house here for sale by the bank at a ridiculous price. Talk about gutted! The basement was deliberately flooded, what was once a cooks dream kitchen is in shambles, carpets are disgusting, marble (Yes marble) entrance looks like it was used for a skating rink and the kicker - a room has been completely removed! I mean walls, electrical sockets, vents and windows. I won't even go into the state of the bedrooms and baths.

The price? $550,000. It will take at least $400,000 worth of work to make it habitable according to a realtor friend.
Makes you wonder what folks think they are accomplishing by doing this type of stuff.

We lived without our master bath for two years while we decided on a course of action. I tore out two walls of tile before discovering that the grout was the only thing holding on the tile on one half of a wall. Suddenly, re-tiling and new fixtures were not all we were going to have to do. Since it was shower only, I juggled with tub options, etc. Adding to that, we didn't know if we would sell or stay. We used the guest shower. This probably happens a lot, and then people run into trouble with their bills. We finally re-did the shower only and put it on the market. It didn't sell and it is now rented. I am glad I took the less expensive route, but perhaps the tub would have helped resale. Water under the bridge.

It wouldn't be fair to further punish people in this situation. When someone can't pay a mortgage, how are they going to pay a $25,000 fine because they ran out of money during a bath remodel?

The "can't squeeze blood from a stone" argument doesn't stop servicers from imposing additional fees on delinquent borrowers, or so I've read in the media. Nor does a sense of fairness. I imagine they must get some money out of some borrowers, even if they can't collect from everyone.

In some cases, the mortgage company is getting what they deserve.

A certain company loaned a relative over $125,000 in home equity for a house worth $140,000 and with a fixed monthly income of $1600. What are they - stupid? A three year old could do the math and figure out that eventually the person will not be able to pay. I might add the relative was an addicted gambler.

Now they are stuck with a disgusting, outdated house in one of the worst markets ever.

PS: the last mortgage statement said in big, bold letters "you may be entitled to receive $13,000 cash from your home's estimated available equity to do whatever you want with it!"

What a joke.

Desperate people do desperate things. Selling cabinets may seem criminal but if you are trying not to lose your car or feed your kids.... Not saying it is right, just that I understand.

"We have a house here for sale by the bank at a ridiculous price...$550,000. It will take at least $400,000 worth of work to make it habitable...Makes you wonder what folks think they are accomplishing by doing this type of stuff."

Why on earth is the bank demanding that much money for a gutted foreclosure house? THAT'S what you should be questioning.

I have 2 buyers who just couldn't get loan on gutted out house. Supposedly certificate of occupancy needs to be issued prior to lender releasing money. Does anybody have an idea who (and how) people obtain loans to purchase in this situation? Are they all cash transactions?

Construction loan that converts to a permanent. These days that will require the buyer to have some 'skin in the game'...unlikely to find 100% financing.

/t

triciae-Breaking & entry into a foreclosed home to strip copper pipes is a crime & should be pursued.

The scrap yards that are buying and reselling this stuff should be held accountable as well.

In a similar vein, a friend of mine bought her condo from a German man and when they did the walk through, he had stripped the condo of things that are usually left, like stove shelves and closet racks, etc. Very weird, but evidently they do that in some parts of Europe.

I'm involved with one currently which flooded when the baseboard heating system pipes burst because the bank never had the system winterized. Most of the first floor is oak strip which buckled as well as the OSB subfloor, easy fix. Wells Fargo will write a 203K rehabilitation loan for 100% of the purchase price. Only new homes need CO's in order to close in MA anyway.

People who have paid for their house 25 years and have been strung along by thier bank that they are modifying their loan to reduce the 9.10 interest rate, only to find out that they have sold the loan to Kondaur for liquidation at their purchase price of up to 80% of payoff are obviously not the people posting about any wrong doings on the homeowner trying to make enough on their loss to find a place to live. If they buy your home to liquidate and make double off what they paid, they should only be entitled to that small amount. I support them taking what ever they need to make it so they are not left homeless. If it is too gut and skin it in these situations they should.

You dusted off a seven year old thread to make your first post - one advocating/justifying illegal action?

Wow!

I know...there's so much there...

You paid on a house for 25 years yet you are losing it to foreclosure? Something off about that. You must have gutted the equity with HELOCs.

If "they" can make double on your house, well, you can too! Get to work. Clean it up and put it on the market.

Good luck!

People who are in foreclosure are mad. They don't want to lose their home due to the unfortunate circumstances that have befallen them. Thus, they might just try to sell anything they can easily sell just to make money for groceries. They know their credit is ruined. They don't now care. They just are in survival mode.

We looked at many foreclosures prior to purchasing the home we now have, and I was in shock at the anger. Beautiful pools destroyed. Built in BBQ's messed up. Not sure if the owners or vagrants, but graffiti and huge holes were knocked in walls. Someone explained they can sell the copper wiring.

We did buy a short sale that was a previous foreclosure. The neighbors, our good friends now, explained that Allen, the foreclosed on guy took more than he should have. We will never know what he took, and don't care to dwell on it. We knew what we bought, and we got it cheap, but we sunk more than the cost of the house into it to make it great.

It is what it is. Expect destruction and theft in a foreclosure.

While not defending the actions of people who do these kinds of things. I will note that our society has come to see bankruptcy as such a blight on the character of the people who exercise it, that this type of blow-back seems inevitable. And I believe that banks have benefited greatly from this perception, so quite frankly, I am not sure I feel sorry for them at all.

Funny how people see things differently. People I know believe the exact opposite; there is no public opprobrium anymore for bankruptcy (or divorce or having children out of wedlock, or marrying a Catholic (!!!)) which is why family finances are in the dismal state they are in.

Banks don't have feelings. They make sure they get paid one way or another. And if everyone in foreclosure stripped and gutted their homes, loans would be harder to get for people on the margins. Wait, isn't that one thing people are complaining about these days? How hard it is to get a home loan when you dont have 20% to put down and are just barely qualified?

While you are right, one could also argue that mortgage securitization by banks and GSE's is so financially irresponsible that damaging houses is just blow-back for banks making ludicrously stupid decisions. While those decisions didn't cause people to default they certainly removed damage mitigation. If banks had acted as lenders instead of servicers for mortgage derivatives then the crisis would have been painful, brief and limited.

Edit: Banks certainly didn't get paid one way or another. That is why we bailed them out. When banks go back to caring about solvency more than profitability then I will go back to caring about banks.

So we advocate wrong doing if not unlawful behavior based on our cares about the victim? lol

Incredible.

I don't think we advocate it. It is what it is! Can you change it SaltiDawg? Go see what your bank will do for you when you can't make your payments because you got laid off or whatever. Understanding is a world different than advocating.

So we advocate wrong doing if not unlawful behavior based on our cares about the victim?

This is the most ridiculously pointless and trollish statement I have seen you make. First, I think most posters have said clearly that they are not advocating what people are doing, for example, "While not defending the actions of people who do these kinds of things..." Next, hello, welcome to earth where everything is not black and white. When a drunk driver hits someone who decided to cross a busy intersection against the light without looking, it is the driver's fault, it is also the jaywalker's fault. There is such a thing as culpability, where two parties have both acted badly and pointing out that one did so, in no way means the other didn't. Banks acted irresponsibly because they cared about a few extra dollars in the short term more than they cared about responsible lending. AND people stripping the houses acted irresponsibly when they sold off the valuable stuff for a few extra dollars in the short term.

The real kicker in the 2008 MBS collapse is that banks knew of the problem. Banks knew they were on a bubble. Hell everyone knew we were on a bubble and not only did they continue making terrible loans they actually invented ways to make them more unstable. And investors celebrated it, small responsible banks were gobbled up by big irresponsible ones, and books were written in celebration of the "good to great" solutions that mortgage companies came up with to make investors even riskier money. Mortgage brokers sold people making $80,000 per year $1,200,000 houses and told them the value is going up so fast you can just refinance when you get behind. While not mitigating the stupidity of the people who took advantage of the deal, I will say, "wow, someone got mad when they got bad financial advice, well color me surprised..."

The sad thing is the banks actually were not only aware of the risk of it happening, they accounted for it. Bankruptcy costs include risky behavior by both companies and people as they near bankruptcy. Fred Smith is usually the quoted text book example when he took the last $5,000 his company had to Vegas because he couldn't pay the $24,000 fuel bill he already owed. I guess it was OK cause Fed Ex is doing fine today. When banks testified in front of Congress one of the prime pieces of evidence for Congress were memos to increase bankruptcy costs to account for the intentional damage by people given sub-prime loans.

So we advocate wrong doing if not unlawful behavior based on our cares about the victim?
"This is the most ridiculously pointless and trollish statement I have seen you make...."

I opine that advocating violating possibly criminal law and likely contract law based on a sense that the bank somehow has done something to justify such theft and you feel the need to launch a personal attack at me? My post was not directed at you personally, but if the shoe fits...

You seem to have a common methodology of taking over a thread by posting an attack on someone and then repeatedly telling folks how much you think you know. See the current thread, "Private College savings - How much is enough?" You have posted twelve plus posts criticizing others with long diatribes that contribute little and served to hijack the thread.

I will not be participating in your game here.

Again, it is my opinion that there can be no justification for stealing pipes, cabinets, or other items in a home that is to be foreclosed.

Suzi, the bank can never ask me about missing a payment because I only bought homes that I could afford, always had money in the bank to tide me over for a year if I had been laid off - thus allowing me to attempt to sell my home.

This reminds me of this case. utsandiego

I agree with you SD, we are individually responsible for our own action, regardless of others actions.

Bad troll is bad, right? I concur that there is no justification for stealing pipes, which would be a victory had anyone said there was. But once again your only purpose seems to be finding some irrelevant or imaginary fault with someone's post.

Yep, I post a lot. Yep, I am decently smart. Everything I think I know can pretty much be summed up by saying, there are many brilliant people who are experts out there, thank god for making me curious enough to look for them.

You would not believe what us RE agents have seen over the last seven years. It takes more energy to do the destructive actions than it would to go out and secure another source of income. The mindset of the people that would waste their time destroying a home just for spite is really immature and self centered.

I know someone that had purchased a modular home in a modular home community. They were being evicted for lot rent unpaid and mortgage was also falling behind. They sold appliances to have money to move and feed there children. They left house in great shape, didn't destroy anything. Only sold the appliances before actually moving out. The community that the home is in is trying to come after them for theft... They were purchasing the home NOT renting it. Does this sound like something that they are just being threatened with or will the the community manager they lived in have to take them to small claims court for that?

Your friends were wrong, and the bank is right. They should not have sold anything and they do owe the bank.

@ awalla2406

Selling the appliances is typically not criminal assuming the appliances were not built in (permanently affixed such that removing them damages the property in some way). You are usually not allowed to sell the fixtures but it would be rare that taking the appliances would be criminal. Furthermore, it is not theft, it is vandalism. If they are coming after them for theft, then the judge will throw it out. If that were the case then everyone's house would have 30 year old appliances because replacing them would be theft.

Your friends should see an attorney anyway. At this point there is a strong possibility that the community has breached the fair debt collections practices act and if that is the case, not only will it stop, they can get significant relief, and all of their attorney fees would be paid.

awalla2406, communities like this can be different than purchasing a freestanding home on a city street. It may be that the community has an ownership interests in the home itself. In that case, Triciae's statement way up there in 2008-land about the home belonging to the homeowner until the bank takes possession may not apply. Only a reading of the purchase paperwork by a legal professional would clarify the situation. If your friend receives any papers demanding anything, it would seem prudent to pay for a consultation with a lawyer before assuming anything.

So, we know someone who's house got foreclosed. After the foreclosure, the kitchen was gutted. I understand not being able to get $ from someone who can't afford to pay the mortgage, but isn't this theft and a crime?

Interesting thread, even if it is a little long in the tooth.

@Adrian Fish - Whether or not it is a crime is of little real consequence. Many things that end up in civil court are actually crimes, but are not prosecuted as such. For example, research shows that more than half of sellers lie on required real estate disclosure, which is fraud. However, it is almost never prosecuted as fraud.

In my experience, damage to the property is typically seen as a risk the buyer assumes and is only prosecuted when it is egregious. It is also difficult to prove it actually happened after the auction rather than before. The previous owners can just say they were selling the kitchen to make good on the loan and were going to install some cheaper things eventually.

If you are going to buy occupied property at a foreclosure auction, you should immediately make nice with the former owners. Incentivize their leaving the property in good condition with cash. One of the lessons that most landlords eventually learn is that it is much cheaper to pay someone to vacate than it is to evict them, so always do that.

Food for thought, bry.

It’s 8 years later and it doesn’t seem like any ex-homeowners got convicted for selling fixtures and systems.

Nor prosecuted for lying on seller disclosure forms. It happened to me in 2005, but we did not know it until 2011. That is when we discovered that our living room was supposed to be at 4” lower than the foyer next to it. I hired our usual contractor to put in used bookcases and office base cabs with additional trim to make it look built-in. When he pulled out the heating vent, he discovered no ductwork. Instead there was a crude wooden box directing the warm or cooled air up to the vent. We pulled up the thick carpet and padding and discovered a plywood floor over 2x4s and wooden shims. Under that was the cracked in two and fallen concrete floor slab. A sledgehammer and a hole to lower the camera showed that we had nothing but air under much of that floor. It was like a small cave under there. $40,000, six piers to hold up the foundation, a ton of concrete and a new floor later, my low-budget library built-ins finally went in. We were so angry at the seller that I wanted to track him down and sue, but I went through a shingles infection, got behind at work, and was too overwhelmed to do it. He got away with it.

That’s so awful! 😢

Nancy -- that's awful!!

What’s worse is that they had disclosed that the home had needed piers for the foundation in the past on the disclosure form and included a letter from the president of the company that makes the piers, saying that the piers had a lifetime warranty that extended to new owners. What they did not say is what we learned from one of the guys digging the 8 ft hole where our living room floor used to be. He remembered being at the house before, when the first six piers went in. He told us that 12-13 piers were recommended by the company, but the homeowner had only agreed for the six that could be installed easily, outside of the house. So, the left side of the living room was supported, while the right side, the foyer, and the garage wall continued to sink. We had cracks in all the doorways that had to be repaired. Our front door and sidelights (one big unit) was removed for the summer of construction and a plywood wall was constructed to separate the construction zone from the occupied house. Each workday, the plywood covering where the front door belonged had to be reinstalled. It was crazy. We had a POD in the driveway, holding the contents of the rooms and garage that were under construction, for six months. It makes me wonder if the foundation company had a responsibility to say that the homeowner had not installed all of the recommended piers in the letter telling us that the warranty extended to us. That letter gave us reassurance that there were no foundation problems with the house.

My company has been doing equity mortgage loans-- that is, mortgages based more on the value of the property less the mortgage than the owner's income and credit--since the 1980s with few defaults. And never deliberate damage. Just some people are slobs! Overall, we've actually come out ahead due to good re-sale prices and charges that can be deducted from the sale price.

But we've re-possessed one now that is bound to be a loser as it's a starter-type home and it is first time home-owners who are most pressed. The borrower had bought it new 2 years ago hopinig to "flip" it for an easy profit. Blame HGTV!

Nancy -- your story went from awful to horrible! Are you sure you have no recourse?

By the time I had recovered my health enough to handle it all, it was 8 years since we bought the house and 2 - 3 years since we discovered the problem and had the work done. I cannot imagine there would be anything to do that would not cost us a lot of money. We did not have extra money at the time.