Buyers' Revenge: Trash the House after Foreclosure

[n2doc]

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.

"If it was me, I'd take the money," Mr. Buompensiero said as he drove away. Either way, they're "going to get thrown out in a couple of weeks."

The most practical way to ensure the houses are returned in decent shape, lenders and their agents say, is to pay homeowners hundreds or even thousands of dollars to put their anger in escrow and leave quietly. A ransom? A bribe? "Yeah, somewhat," says John Carver, an agent specializing in foreclosed homes for Prudential Americana Group in Las Vegas. But "you lose a house, and then you get some financial help -- it's a good thing...It's a win-win for both parties."


No one tracks how frequently such payoffs are made. In Las Vegas, agents hired by the banks to handle foreclosed properties say the "cash for keys" approach, as it's known in the industry, is a regular part of the job. After all, formal eviction proceedings can take months and cost potentially much more than a payoff.

more:

http://online.wsj.com/article/SB120665586676569881.html

[mdmc]

1. I saw something like this yesterday here at DU

w/o the wsj link:kick:

[Stinky The Clown]

17. Yeah ... this same story

I recognize the guy's name ...... very similar to The Soprano's "Big Pussy" character.

Sal "Big Pussy" Bonpensiero (played by Vincent Pastore)

[Waya]

2. You lose a house..............

.....and then you get some financial help. Yea, right. $1000 bucks. Yea, better than nothing - but in most places that doesn't even pay the deposit and first month's rent for a place to live................

[seabeyond]

3. Buyers' Revenge.... for what? making a really stupid choice

in life. i dont get this. people made poor choices buying stuff beyond their means with no changes in income and health.... and they should feel warranted to revenge.

if someone ended up in dire straight cause of lost job or health, empathy, .... but these loans. i mean... lesson learned move on. if it sounds to good to be true, it is

it feels like the buyer has the right to feel the need of revenge and i just dont see it

[Tempest]

4. A good many foreclosures are from mortgage company fraud

That's why states are investigating and suing mortgage companies.

There's a federal investigation going on as well.

[DadOf2LittleAngels]

5. Most involve greed on both sides.

I know people who have had to refi but in the past years have bought a boat, and other luxuries...

I myself am going to try and sell my house and am coming to grips with the fact I may lose money I did not put enough down, I was greedy and I may sell my home and still owe after that.. Im going to tuck it away as a life lesson..

[seabeyond]

9. seeee, ya... that. lol. perfect example. and it doesnt hurt.

lol. i have done stupid financial things myself. they were wonderful lessons and now i am old and i am much better at thinking twice because of those lessons. but... i owned them, learned from them, and really, cause i wasnt lying to self, didnt hurt. it is the protecting self that cause the pain.

anyway.

thanks for the example. and hope all works perfectly for you....

[DadOf2LittleAngels]

12. Me too

Im trying to move back east to be close to my parents who are aging and my wifes parents who would love to lavish our kids (their only grand kids) with attention ;)

Ive decided when we get there were going to rent, yes I will be ;throwing away money' but the plan is to buy a double lot and in a few years when I tuck away 20% of the cost to build a home.. I have an interview coming up next week, it will be a significant pay cut but the hours and environment will be superior (not that I don't love my current employer but its private sector IT so its very stressful at times)..

[seabeyond]

14. ya... and family, it is important.

you know, another thing, since i have gotten older. lol. how important it is to all the kids. i was single for so long and independent on my own, but with kids... they really have a need for family, extended family. sacrifices are worth it.

[DadOf2LittleAngels]

15. Yes up here my wife and I

are without family and while we have a nice community of people that have been with us through some serious health problems its not family. One thing that was keeping us away from family is their cavalier attitude about my girls peanut allergies they though I was being snotty when I said no peanuts in the cottage at the last reunion. But one kids has outgrown it (Praise god) and the other is getting her three year test in the coming months. - On knees praying...

Problem is Im moving back to NY where taxes are way higher (my house here is valued 50% higher than my parents but my property taxes are only a 3rd..

But thats the way of it isn't it? I moved out here when I was single and loved the freedom but the minute you get a bit older and have a family of your own you want them to know grandparents, cousins, aunts and uncles, ...

If I move back east I have to take Korean back up, my wifes family will be over often and I really do owe it to them to not be the clueless guy in the room whos wife has to tell him what everyone is saying..

[Warpy]

6. They really pushed an ARM at me, pushed hard

I had to grab my papers and head for the door to get them to stop talking tommyrot.

People who aren't sophisticated to know about this stuff fell for those teaser rates. A court recently said any rate more than 3% below the going rate for a 30 year mortgage and any ARM or other loan that reset in three years or less was inherently unfair. The decision is being appealed, of course, but these loans were inherently unfair and took advantage of people who deserved to have things like risk explained to them by lenders.

Face it, lenders were dishonest in a lot of these cases and didn't act in good faith, especially when clients were young, minorities, women, or anyone else they expected to be poor and unsophisticated.

Plus, job loss followed by underemployment does figure into a lot of foreclosure of owner occupied housing.

[seabeyond]

10. the credit cards 26% and beyond. or those rent a center things...

i hate them. absolutely hate them, think the people doing them are scum to take advantage fo peoples wants and desires (not needs) and exploit the people into the unfairness of it.... yet still... it is on the people that cant/wont say no.

i know there is unfair out there. but ultimately, these people are maiking the choices.

[DadOf2LittleAngels]

13. My only problem with your post

is the attitude that people, other than you and those like you (and me because I did the same thing) are too stupid to care for themselves. It does not take a genius to look at a mortgage with a ceiling 9% above what they are giving it to you at and to say

ok at 12% interest what will my payments be... Im not generally a savvy guy in such matter as I made many mistakes in buying a home but getting an arm when fixed rates were at their lowest in x years was not one of them.

[Warpy]

16. Unsophisticated and stupid are two different things

The first can be remedied by education, which is what an honest mortgage broker will do when he explains the risks inherent in subprime, risky mortgages. The second is forever.

Perhaps if you'd read my post more carefully, you'd have understood that.

[LiberalEsto]

7. But they lose their equity

Foreclosure means you are screwed out of whatever equity you might have put into your place. Say you scrimped to make a $5,000 down payment, and then put in lots of hours fixing up the place considerably increasing its value.

Then you lose your job, or get hit with a major illness, and can't make mortgage payments. The bank takes your home and every penny you put into it, and you're left with nothing. I think this is outrageous. People should at least be given their initial equity money back.

Foreclosure doesn't necessarily mean someone obtained a risky loan. It could have been a perfectly ordinary fixed loan, but people's circumstances change. People can also get screwed by mortgage lenders.

Twice in my life, in separate states, I have received notice of a sheriff's sale for my house. Why? Because my mortgage company wasn't paying the local property taxes, even though I was paying them a certain amount every month for taxes. I had to raise hell with the mortgage companies, call consumer affairs, the state attorney general and so forth, in order to save my home.

[shraby]

8. That's why we have the tax escrow money sent to

us when the taxes are due. The check is made out to the city and to us. I then take it down to city hall and pay the taxes..that way I know they're paid in full and on time.

[seabeyond]

11. i am not talking about those that lose job, health issue or mortgage co

not paying taxes. that is a whole different thing.

i just see the homes going up around me and the cost of them, and people moving in ad thinking, .... geez, dig yourself a hole.

they do

and then dig deeper and deeper until they can no longer climb out.