Defaulting homeowners strike back
House Keys
By Marcie Geffner, Tuesday, June 23, 2009.
Flickr image by lrargerich.The windows are broken. The doors are off their hinges. The walls have been punched through like Swiss cheese. The appliances, curtain rods, faucets and other supposedly built-in fixtures have been ripped out and presumably sold. Paint or perhaps motor oil has been poured over the once-pristine carpets. The basement has been flooded. The plumbing is stopped up, and the stench is indescribable.
All that -- and much more -- describes the state of many of the homes that are for sale in foreclosure-wracked markets around the country. And much of this destruction has been committed not by vandals or squatters, but instead by the former homeowners themselves as a sort of toxic parting gift for the bank that foreclosed on their mortgage. Some homeowners have even abandoned their pets inside their home with the sure knowledge that a hungry, desperate and trapped animal would add to the destruction.
It's surprisingly easy for me to imagine the sort of anger that would push a homeowner to destroy his or her own home. Indeed, these homeowners have plenty of reasons to be angry and plenty of people at whom they might want to vent their anger. They're angry at mortgage brokers who pitched toxic loans.
They're angry at Realtors who sold houses at inflated prices. They're angry at public officials who promised them the American dream that turned into a nightmare. They're angry at today's homebuyers who can purchase an identical house at half the price. They're angry at their spouses. They're angry at themselves. Maybe they're even angry at their sadly abused pets.
Perhaps most of all, they are angry at the lender who holds the mortgage. While the argument over who is most to blame for the foreclosure crisis will continue for years to come, the destruction of a home hurts no one as much as the lender who foreclosed on the loan and typically must take the loss on the sale of the damaged property.
Some feel compelled to strike back and destroy the asset that secured the foreclosed loan. Faced with that opportunity, they cannot resist the temptation to wreak at least a little havoc before they are evicted from the property that had been their home.
It's easy to stand back and moralize about the obvious wickedness of such destruction. Since the property technically belongs to the bank, these damaging acts could be classified as vandalism and theft. Moreover, it's just plain wrong to destroy private property, even if it was yours once upon a time and is now slipping through your fingers.
And yet, while I may agree in theory with those admittedly valid moral arguments, I still have to admit that my true sympathies in these narrow circumstances are mostly with the homeowners. Perhaps my feeling is just as wicked or as equally wrong as the destruction itself, but there it is all the same.
Let's be honest: Anger is a basic human emotion, and it is by nature destructive. If these almost ex-homeowners didn't express their anger through these sorts of destructive acts, what else might they do to get themselves through the sorrowful days while they wait to be evicted from their lost home? How else might they release and process their grief and the anger they feel toward others and themselves?
Would we prefer a spike in spousal and child abuse? A rash of suicides? An outbreak of crime sprees? Or maybe even an army of homeowners "going postal" in bank branches around the country? The alternatives aren't pretty, and it's pointless to suggest that people should just not be angry when they feel such strong emotions.
Unless we can provide healthier alternatives for these former homeowners to vent their anger, perhaps the damage inflicted on some houses is the least offensive solution for all concerned.
Marcie Geffner is a veteran real estate reporter and former managing editor of Inman News. Her news stories, feature articles and columns about home buying, home selling, homeownership and mortgage financing have been published by a long list of real estate Web sites and newspapers. "House Keys," a weekly column about homeownership, is syndicated in print and on the Web by Inman News. Readers are cordially invited to "friend" the author on Facebook.
***
What's your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.
All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.
You must login or register to post a comment.
Submitted by Marty Boardman on June 23, 2009 - 10:11am.
I have a client who purchased a home at the courthouse steps. The former homeowner must have spent at least two days removing the appliances, blinds, ceiling fans, cabinet hardware, light fixtures, faucets, even the 9 volt batteries from the smoke detectors. I know the homeowner didn't strip this house to sell these items for extra cash. After all, how much is a used ceiling fan with no installation kit really worth on the open market? He did it because he was angry, plain and simple. However, no amount of anger in the world can justify this type of behavior.
My blog: freerealestateeducation.com
Submitted by David Schmidt on June 23, 2009 - 12:29pm.
Anger is never justification for vandalism and theft - never. Anger is understandable and it is arguable who or what that anger should or could be directed toward, but to somehow equate violence to animals or people as the only equitable alternative to vandalism and theft is hardly appropriate. Anger can and should be dealt with in positive ways. Go for a walk, go for a run, get to the gym and hit a heavy bag, go out to the middle of a field and scream at the top of your lungs, get on your knees and thank God you're still breathing. In fact, if you're in Michigan or any other state that has a lengthy redemption period, be thankful for such a liberal grace period in which you can arrange for a short sale of your property or just save up whatever you're not paying in monthly payments so you can afford to put money down on an apartment.
Even if you are at your wits end, find a family member, friend, clergy member, or someone you can talk with. Network and brainstorm ways to get out from under your terrible predicament.
But let's remain sensible here. Wanton destruction of property is wrong. Period.
Submitted by Jeremy Brandt on June 23, 2009 - 12:40pm.
"my true sympathies in these narrow circumstances are mostly with the homeowners"
You must be joking. This is an example of what is wrong in this country. Anger and frustration are no excuse for destructive or violent behavior. We've turned into a nation of children that throw a tantrum when things don't go our way.
And now, we have sympathizers in the media that say "it's OK, we know how you feel".
It's time for some responsibility. From home owners AND from the media.
Jeremy Brandt
Founder, CEO
1-800-CashOffer
www.CashOffer.com
Submitted by Lori Cox on June 23, 2009 - 12:48pm.
A distressed homeowner often feels justified in the destruction of the property because that mortgage holder "has it coming to them". This housing catastrophe needs to be managed in a way that heals distress not further destroys the property. For the real estate professional, discussing with distress homeowners about housing groups that can assist them rather than leave the homeowner to further destruction would be the best help a homeowner could receive. To justify this destruction as acceptable...rather than beating children or committing suicide, etc., is a very poor way to rationalize away very inappropriate behavior.
Submitted by Paul Francis, CRS on June 23, 2009 - 12:50pm.
And more often then not... these were homes purchased with no money down with the hopes of getting rich quick with artificial appreciation rates.
Let's face it... the lax lending standards and pushing the Home Ownership for everybody was one bad social experiment.
Living in the home for free for several months, destroying the home and leaving pets behind has more to do with someone's character then anger.
Paul Francis, CRS
Prudential Americana Group
www.LasVegasRealEstateHome.com
702.592.3058
Submitted by Jacob Wills on June 23, 2009 - 12:55pm.
There's plenty of both sympathy and blame to go around... not all defaulting homeowners are to blame, but neither are they all innocent victims. Stereotyping them one way or the other does nothing but spawn more anger, fear, and destructive behavior.
The conclusion of this article is irresponsible and offensive. One of the hallmarks of a civil society is that we all are responsible for our actions. We all experience anger -- some minor and some life-altering -- but it is the ability to process that anger without hurting others that separates responsible adults from criminals. Yes, violence against a house is less horrific than violence against people, but there is no excuse for either.
Jacob Wills
www.holistictechnologies.info
Submitted by James Dwiggins on June 23, 2009 - 12:58pm.
I am personally sick and tired of the lack of responsibility Americans have for their actions. These people should have criminal charges filed against them and thrown in jail. I was taught one simple basic rule in business and it doesn't take a Genius to understand it. If you don't know what you’re signing, THEN DON'T SIGN IT. Now as a taxpayer, I get to pay for everyone else, and on top of it, everyone just continues to point the finger the other way and not accept responsibility for there involvement in the problem. Here is how screwed up this country has become. I own two houses, of which I make my payments on time every month, have lost a ton of money - like everyone else, yet I will continue to make payments and fulfill my obligation to the bank. I am a man of my word, I signed a contract, and will honor it. Yet, now this country is about rewarding bad behavior by allowing everyone who doesn't pay their mortgage payments on time the ability to modify their loan. Ok, I understand the dilemma and why we need to do this, but here's the best part. Those of us that do pay them on time cannot modify our loans or speak to someone about it unless we stop paying them. Once again, lets reward bad behavior... This country and every citizen in it need to take responsibility for their actions and the consequences that comes with it. You will never learn from your mistakes if people keep bailing you out! I for one am done with the sympathy card.
Submitted by David Podgursky on June 23, 2009 - 12:58pm.
I agree...there is no excuse for this behavior
I understand homeowners are HURT...but the home is a place of warm emotions and memories, why would you destroy it? We don't mutilate the bodies of our loved ones prior to burial!
Also - why would Realtors be at fault for prices? We didn't control or fix them? A buyer that bought at a price and then lost value didn't do so because the Realtor did something wrong. There are some isolated cases of collusion and fraud out there but they're far from the Norm. The fair market value and fair market price were set by the MARKET
These people really have no motivation NOT to take out their anger on the property! But Karma bites back and they'll learn that soon enough.
Submitted by Tina Merritt on June 23, 2009 - 12:58pm.
When the foreclosed former homeowner gets convicted of vandalism, theft and and/or animal cruelty and now has a prison/criminal record will you still sympathize with the homeowner?
There is no excuse for leaving a helpless animal behind or for sabotaging the property. These are criminal acts - plain and simple. I have heard of homeowners pouring cement down the drains and putting dead animals in the ductwork. That type of behavior is reprehensible and those people don't deserve to ever be homeowners again.
Submitted by Ron LaMee on June 23, 2009 - 1:05pm.
Marcie, you blew it on this piece - the rationale is slim and doesn't even appeal on an emotional basis. Everyone has their own ways to "release grief and anger," but it doesn't come down to either "hit the kids" or "trash the house." I'm certain that trashing a foreclosed home is not unique to this day and age, just more common. I empathize with the feelings, but basic human dignity and integrity would focus these energies into more appropriate channels.
Ron LaMee
VP Information Svcs
Arizona Assn of REALTORS®
Submitted by Dirk Knudsen on June 23, 2009 - 1:06pm.
I have to tell you that many times the anger is not displaced but perfectly placed. The Bank refuses to negotiate, refuses to modify, and basically plays a game with the owner to see how miserable they can make their lives.
Realize that the lender has hired a call center in India or Indian. Their are 300 cubicles. Call center agents are laughing and throwing paper air planes. At the water cooler they laugh about different ways they have flustered or confused the homeowner. They joke about some of the cases and how stupid people are. Documents are "lost" even though they have been sent in multiple times. Agents on the 4th or 5th call from the homeowner tell them "I am sorry you have been dealing with the wrong person....". Then they offer a new number which is the agent three cubes over who waits smiling. The game starts all over.
So when Bill and Suzy Homeowner can not sell their home, are upside down, and are being foreclosed out on a loan that their Countrywide et. al. rep had them lie about their monthly income on a "Fast and Easy" loan application.....can you blame them??
Right or Wrong....illegal or not; based upon what I have seen the actions are somewhat justified. The bank is basically made whole through government intervention. The Bank execs are on hiatus in Cabo and Bill and Suzy not only lost their home...but owned stock in the bank through their 401K and guess what...that is gone too.
Banks are lucky more folks don;t damage their homes. I have seen this several times. We had a gentlemen here in Portland that let three very big hogs go inside the home and they got so hungry they ate the sheet rock, the walls, and the cabinets. It was shocking but quietly I think a pretty large crowd of folks were saying...."Great job! You showed them".
In the world where it is becoming more and more the Haves Versus the Have-nots these types of deeds are becoming almost heroic. Maybe if a stock holder in the bank or an actual Board Member took a 5 minute phone call with each owner they would inject humanity back into the equation and stop this nonsense. But they won't and so we will see a continued movement towards an anarchical system and process where disgruntled home-owners will be revered for their Robin-hood like actions.
And Marcie is right. This is the least damaging outlet for society. Otherwise we will see far worse crimes leveled and their will be human lives involved.
I think myself like many seasoned professionals hoped that the Obama experience would be more hands on, more personal, more on point and more caring. Unfortunately nothing could be further from the truth and all we are left with are colorful images on a poster of the man who has so far put form over substance.
For me I have seen both sides. I am here for my homeowners and on this one I am with them. Screw the banks. They are reaping the bitter harvest from a crop they have sewn and if anybody thinks it is anything but US against Them they are living in a false vision of the world that was not too long ago true but in today's America is not.
God bless the disgruntled home owner and all those who have lost, are about to, or will loose their home. Let your conscience be your guide.
How's that for venting??
Dirk Knudsen
Portland, Oregon
Submitted by Timothy Countryman on June 23, 2009 - 1:11pm.
When did we enter this era of entitlement? Whatever happened to accepting responsibility? Whatever happened to respect for the property of others? Whatever happened to personal dignity? When a person resorts to this behavior, they have devalued themselves as much as the property, and in the end, they have not solved the source of their anger. We cannot condone this behavior or find justification for it. All that does is feed into the growing immaturity of our society. We need to hold those who would take such actions accountable. Most of all, they need to hold themselves accountable.
Timothy Countryman, GRI, CRS, CRB
Licensed Real Estate Broker/Owner
Countryman Real Estate Associates
www.CountrymanHomes.com
160 Route 17K
Newburgh, NY 12550
(845) 567-6789
Submitted by Utah Realtor on June 23, 2009 - 1:13pm.
It's sad, but people just need to grow up and take some responsibility. Nobody forced them to sign their mortgage note. It's not the banks fault they didn't make their payments.
Alan Barker
Cornerstone Real Estate Professionals
http://www.utahcornerstone.com
http://www.utahrealestate4sale.com
Submitted by Jay Thompson on June 23, 2009 - 1:19pm.
"...the destruction of a home hurts no one as much as the lender who foreclosed on the loan..."
It hurts the neighbors and the community too. The ones that diligently met their legal and ethical obligation to pay their mortgage. When the thoughtless, selfish, unable to deal with their anger homeowner trashes their home, it brings down the value of the homes around it.
It's the lender's fault, It's the agent's fault. It's the government's fault. Blah blah blah. Who held a gun to this homeowner's head and forced them to sign for the loan? Sometimes it's the homeowners fault. Period.
"Unless we can provide healthier alternatives for these former homeowners to vent their anger, perhaps the damage inflicted on some houses is the least offensive solution for all concerned."
You've got to be kidding me. Want a healthier alternative? Try GROWING UP. Let's face it, sometimes life throws you a curve ball. Yet we're supposed to sit back and let people throw a freaking temper-tantrum and say, "Oh, it's ok to be angry. Go ahead and trash your home. So what if it's illegal and so what if it impacts the home value of everyone else around you."
Give me a break.
I like ya Marcie, and typically enjoy your writing. This one made me a little angry. I guess I'll go break something or steal something that doesn't belong to me and all will be better.
Jay Thompson
Broker / Owner
Thompson's Realty
Blog: www.PhoenixRealEstateGuy.com
.
Submitted by Jay Thompson on June 23, 2009 - 1:27pm.
Dirk Knudsen wrote, "...and are being foreclosed out on a loan that their Countrywide et. al. rep had them lie about their monthly income on a "Fast and Easy" loan application.....can you blame them??"
Had them lie about their income?
Sure that happened. And you know what? The person that lied about their income is just as responsible as the person that "had them lie" about it.
You're damn right I can blame them. I can blame the lender that proposed the lie *AND* the borrower that did the lying.
Since when did it become acceptable to say,
"But the lender told me to lie, so it's not my fault"???
Jay Thompson
Broker / Owner
Thompson's Realty
Blog: www.PhoenixRealEstateGuy.com
.
Submitted by Jay Thompson on June 23, 2009 - 1:30pm.
One last comment and I'll shut up.
People ARE getting arrested for this behavior. And I say "it's about time".
http://www.phoenixrealestateguy.com/phoenix-area-police-arrest-homeowner...
Jay Thompson
Broker / Owner
Thompson's Realty
Blog: www.PhoenixRealEstateGuy.com
.
Submitted by Tom Dawson on June 23, 2009 - 1:31pm.
Once again, it's all somebody else's fault. Nobody explained it to me. I didn't understand what I was signing. Just keep the excuses coming. I'm sure there are some out there who had no idea what they were doing and were duped. But the vast majority of people I know that are in this position knew exactly what they were doing - betting that appreciation would never stop!
How do you conclude that destroying property makes any sense at all? Doesn't it just increase the amount of money the bank will ask for the house and just make it that much harder to sell?
A very foolish article!
Submitted by Deede Wockenfuss on June 23, 2009 - 1:32pm.
James Dwiggins says,
I am personally sick and tired of the lack of responsibility Americans have for their actions.
Obviously, you don't live in Arizona, or one of the other 3 states that have been devastated. I could cite homeowner nightmares that would make your hair stand on end, but I am going to cite a case that I am currently working on.
Purchaser put 10% down payment on a $210,000 home two years ago. Unfortunately, this home is currently worth about $100,000. This homeowner wants to do the right thing. He contacts his mortgage company, tells them his situation ( he has a job, but with a 20% cut in pay). His current payment on this property is $1650. He tells the bank that he can afford to pay $1000 per month and that he will try to stay in the home several years hoping that the value will increase. Bank tells him that they do not see a problem, as he is CURRENT on his mortgage, so he must be in a position to pay the agreed $1650. Borrower says that due to the value of the home, he is overpaying by 50%. There is an identical home down the street for rent for $850 per month. The bank says, "Sorry, we don't have a program for you". Immediately, the borrower STOPS paying his mortgage payment. Should he let the home go to foreclosure? Should he attempt a short sale? This is an older home, and the homeowner has added thousands of dollars worth of improvements to the home. If he walks, he will never see his downpayment OR his investment in the improvements. Is he angry? You don't want to know what he has threatened.
Bottom line is this: Banks need to quickly and graciously modify the loans of people in this man's position. It is better to get $1000 per month, than a stripped shell and a loss of over 100K. The full loan amount stays on the books, which means there is no 'paper loss' to the bank. Don't the share holders of these banks know what these idiots are doing? They are BANKRUPTING our country. Homeowners have lost their equity, lost their jobs, some their marriage, moved adult children back in the home, etc. They are DONE. They are not willing to lose anymore. NONE of this was this man's fault, but he is expected to possibly pay the rest of his life for an economic situation caused by rich, greedy businessmen.
I am going to put the home on the market as a short sale. During this period, the bank will get NOTHING. It could take months or even a year to put together, and if the bank continues to refuse to play ball, it will be a stripped foreclosure. I have absolutely NO SYMPATHY for the banks. I am looking forward to the entire system falling apart, which it will, unless the banks start to realize that they are just NOT in control any longer.
Deede Wockenfuss
CybrSold Concepts
A Frugal Virtual Real Estate Company
480-248-9500
http://www.CybrSold.Com
Submitted by James Dwiggins on June 23, 2009 - 1:32pm.
Dirk Knudson, I’m reading your comments and basically I’ve come to realize you are so misguided it’s actually scary. So let me break this down for you.
1.) When the homeowner agreed to put down an income number that’s highly inflated from what they actually earn - THAT'S CALLED MORTGAGE FRAUD, and is a federal offense. To say the homeowner didn't know what they were doing is completely insane! Any person on planet earth knows that if you make 5k a month, and put down that you make 8k a month. YOU’RE LYING ON THE APPLICATION!
2.) When banks are made whole through government bailouts, you should be blaming your politicians, not the banks. The government is enabling this bad behavior.
3.) I cannot believe you think vandalism is heroic. God, I hope you don’t have kids.
4.) When homeowners damage the homes, you end up paying for it, in case you didn't realize this! More losses at the banks, means more government intervention, which means more taxpayer responsibility. But hey, if you want to bailout everyone else that's fine, you can have my share of the taxpayer pie too!
Submitted by John Rakoci on June 23, 2009 - 1:51pm.
WoW! After such a statement as "my true sympathies in these narrow circumstances are mostly with the homeowners" I wonder why you still have a job! What you described is a crime and the criminals should be prosecuted. Credit agencies should have a 'flag' notating such behavior so they can not borrow enough to buy the steam off a hot dog the rest of their life! Where is their responsibility? Where is their self respect? Beating the kids or being cruel to animals should put additional years on their sentence. Jail would eliminate their problem of where to live. I would have more respect and sympathy if they did jump off a bridge than becoming a criminal. Anyone in the profession that advocates or condones criminal activity reflects that upon the rest of us. Marcie, you should be very ashamed to feel that way and should no longer have the ability to put it out in the media!
Submitted by Ann Henry-Dean on June 23, 2009 - 2:08pm.
There seems to be a thread running through these comments that appears to imply if the borrower would have been “honest” and if the borrower would take responsibility this problem would greatly reduced. Did the lender check any statement on the application? Folks you do not appear to get it. The entire system was and still is to a large degree corrupt and in denial. There is no virtuous hero anywhere among any of the players, borrower, lender, lending officer, realtor, banker selling these mortgages as “investments”. Everyone attempted to live the dream, sell the dream, buy the dream, package the dream, etc. The party is over and all of the participants should pay the price. This imaginary money is long ago spent. Everyone go look into your mirror, suck it up, welcome to reality.
Submitted by Marty Boardman on June 23, 2009 - 2:08pm.
My parents taught me to respect other people's time, feelings and property. I'm happy to read that most of us who have posted in this forum feel the same way and do not condone this type of behavior.
Marty Boardman
Loan Modification Consultant
Choice Loan Consulting, Gilbert, AZ
My blog: www.freerealestateeducation.com
Submitted by MJ Cam[p on June 23, 2009 - 2:11pm.
There are a bunch of angry REALTORs in this group. But I'd like to start by saying that having worked in the industry for more than 10 years (not as an agent, but helping them) I would like to point out another side of the story that everyone seems to be missing.
Not everyone bought homes with nothing down, sub-prime promises, or to make a quick flip and an even quicker buck. Some of us, paid 25% down, bought our home at a reasonable price and spent the next eleven years building our investment.
No, I'm not looking for a re-fi, but it would be nice to have some help. For eleven years, I have paid my taxes, my home insurance, my mortgage and now that is not currently possible. Both me and my husband have been unemployed due to no fault of our own except living in this economy. I think as REALTORs it is important to remember the responsible, human side of this very sad story.
Hopefully, I'll be using a REALTOR to sell my current house before foreclosure happens...and yet again, when I can responsibly--once again--buy the American Dream.
Submitted by Jay Thompson on June 23, 2009 - 2:43pm.
"Borrower says that due to the value of the home, he is overpaying by 50%."
Since when does real estate do nothing but appreciate?
Using this logic, every car loan in the country should be modified as soon as the new owner drives it off the lot.
Never ceases to amaze me how many people will willingly purchase an untold number of things on an 15% interest credit card and pay on it for years, long after whatever they purchased is lost, broken or worn out. But they expect their home to do nothing but gain value daily.
My heart goes out to people hit hard by this housing mess. I *do* live in Arizona and have watched my home value plummet (of course, no one here was crying when the value was climbing through the roof. But that's a whole 'nuther story)
Jay Thompson
Broker / Owner
Thompson's Realty
Blog: www.PhoenixRealEstateGuy.com
.
Submitted by Marcie Geffner on June 23, 2009 - 3:02pm.
Wow. There are certainly a lot of very angry and self-righteous people here today.
I do *not* encourage homeowners to destroy their homes. Nor do I condone such behavior. Nor do I believe such behavior is justified. As I wrote, "It's just plain wrong to destroy private property."
Moreover, I certainly do *not* condone violence against people or the abandonment of pets. Nothing in my column suggests that anything remotely like that would be OK.
I do feel that people are very angry and upset, and I do believe that we need to have some basic human emphathy for their feelings and their need to get some relief from their emotional pain. I don't condone their unjustifable actions, but I do understand how they feel and why they do it.
Social services are not equipped to help them. Friends and family may be just as merciless as the people on this thread.
Have we really become so cruel and hard as a society that we can't feel any human kindness or plain sympathy for people who are in such pain that they would destroy their own home?
I find that sad--and more than a bit scary. The fact is we are all a lot closer to that edge than we may be willing to admit to ourselves.
Marcie Geffner
www.marciegeffner.com
Submitted by James Dwiggins on June 23, 2009 - 3:13pm.
Jay – I agree with everything your saying!
Deede,
I appreciate your response; so let me dive a little deeper into my perspective. First, I whole-heartedly agree that banks are the problem too. Everybody involved has something to do with this mess. However, my main point to everything I have stated above is that I’m tired of everyone giving homeowners the sympathy card for their bad choices as well. I live in California, so I understand the problems quite well. My company handles thousands of foreclosure sales a year, so I have a pretty deep knowledge on this. With that said, don't get me wrong; in many cases these foreclosures are a sad situation, where good people with good intentions got caught in the mess. Look, everyone knows real estate is cyclical. It goes up and down like any investment. Your client was happy to pay for the home when it was worth $210,000. But, it dropped by over 50% in value, and now he's not ok with paying for it anymore because he has lost so much money, and had to take a pay cut. However, he made an agreement with the bank and was happy to do it when it was in his favor. Now he wants the bank to renegotiate. Well, look at it this way, what if your client made $110,000 on the home instead of losing it? Would he be ok if the bank came back to him and said that since the home gained value they want to raise his payments? No, he wouldn’t be ok with that. A contract is an agreement between two parties. There are risks and possible gains. Now granted, he had a big pay-cut, but its apparent he also over-extended himself when purchasing the home. I use the analogy of buying stocks. It’s a risk! You put money in, hoping it makes a return for you. If it doesn't, you lose the money and that's it. You took the risk, and it didn't pay off. Nobody bails you out; the company you invested into doesn’t give you the money back, and you have to accept responsibility for your choices. He made choices, took risks, and now has to deal with them. Same as I made choices to buy some houses, took risks in doing it, and will have to accept the consequences whether good or bad. Nobody knows the future, which is why it’s called a risk. Risks are how we learn and don’t end up making the same mistakes again.
Submitted by Jay Thompson on June 23, 2009 - 3:25pm.
Marcie -
Obviously your article struck a nerve with a lot of people.
But to call those who disagree with you "self-righteous" is just a wee bit, well, self-righteous don't you think?
If you are going to post on a media site that, "perhaps the damage inflicted on some houses is the least offensive solution for all concerned", then you should expect some back-lash.
In my opinion, the least offensive solution for all concerned would be for the home owners placed in this unfortunate situation to learn to deal with their anger via non-destructive, non-criminal means. Talk to a counselor, beat the hell out of the equipment at the gym, take up the cause and write letters to their elected representatives, peacefully protest. There are a multitude of ways to deal with anger that don't involve destroying property, negatively impacting your innocent neighbors, and committing criminal acts.
Jay Thompson
Broker / Owner
Thompson's Realty
Blog: www.PhoenixRealEstateGuy.com
.
Submitted by Greg Salera on June 23, 2009 - 3:45pm.
There is a breakdown in our society. Until the laws governing our nation protect the innocent and reward good behavior instead of the bad this breakdown trend will just worsen over time, at least in my opinion. Banks and businesses should be reduced in size so that they are never "too big" to fail and bad business practices should not be rewarded with handouts. Likewise, borrowers should be held responsible for their decisions regarding homeownership when things get rough for them. When faced with foreclosure people may get upset or become angry as those are normal reactions, however, crimes of stealing, vandalizing, or abusing animals should not be considered acceptable.
We are all promised a right to the pursuit of happiness, it's not guaranteed or owed to us. This attitude of passing the blame only weakens the foundation of our society. Evidence of how broken we are as a society is listed in the above comments over and over. It's very troublesome indeed and it's not going to get better regardless of who wins the lender/borrower who's at fault argument. It will only get better with policies that enforce our good will and policies that do not condone bad behavior much less promote it.
Greg Salera
Partners Real Estate
9300-A Old Keene Mill Rd
Burke, VA 22015
www.virginiarealtyservices.com
Submitted by David Montgomery on June 23, 2009 - 3:50pm.
Foreclosure damage has been on-going... and the lenders do not seem smart enough to develop a preventive plan. They will take a $20K to $50k hit in damages rather than try to protect a home. Owners move out... electric service is cut-off, water and waste lines freeze and a few dollars monthly in energy costs "saved" results in thousands of dollars in damage. Plus, the buyer has to absorb the additional inspection costs to turn on/off utilities to test for damage which discourages buyers.
Houses sit empty for months... why not negotiate an orderly departure for buyers. Let them stay in the home as tenants for 6 months for no rent in return for a no damage departure and cooperation with Realtors? But, coming up with a plan that would save lenders and buyers money just seems beyond the comprehension of those who will collect their paychecks regardless.
Submitted by Wenceslao Fernandez Jr, BS, Realtor, CDPE on June 23, 2009 - 4:39pm.
Wow, Marcie...you certainly struck an emotional chord! A subject as toxic as everything about it!
Many of your points are well taken by me as are most of the points presented by the responders.
Blame is everywhere...
>The government who allowed standards to be laxed, specially the Treasury, SEC and Fed
>Politicians who played the FNMA & Freddie game (AND Fannie and Freddie themselves for encouraging all this)
>The banks who concucted and promoted these liar-loan programs
>The borrowers who took advantage of the opportunity and simply, lied
>The appraisers, Realtors and mortgage brokers and lenders who may now be in jail or should be (when they participated in a scam)
>The investors who created the (in)famous CDOs and sold them to other equally greedy investors/countries
>Even those who borrowed too much and are somehow still making their payments (and yes, many borrowed on liar loans and are still making their payments), who also contributed and helped skim, scam and inflate market values by creating yet another "comp" and
>lets not forget...everyone else in between, below and above, etc, etc
In short...let he free of sin cast the first stone!
Now...the aftermath. A scrambled system completely insolvent and full of holes, cracks and plain broken down.
It will take years to restore confidence and even fully recover to the point where we may once again, someday, see a real estate rally.
Now, not only regular Americans are refusing to accept blame, but so is EVERYONE I mentioned above (including those I did not mention).
EVERYONE is looking for the scapegoat while forgetting that, every time they point a finger at someone...there are THREE fingers pointing right back at them!
At this level, are the lenders who put together these loans, promoted them, sold them, underwrote them, funded them and got paid when they passed the "hot potatoe" to Fannie, Freddie or a number of other investors who did the very same with every CDO and fancy trick they came up with, the government, etc.
Now, the lenders are being pushed by those who are refusing responsibility for their part in the mess and so...since dirty water runs down hill (think of what I really want to say), the lenders are pushing down on the people they once lured.
In the process, there are those who simply should have NEVER been homeowners, just as there are many well-meaning folk who got caught in the economic aftermath of everything that has happened in the last couple of years.
These are the folk I try to work with. Those who trully need and deserve my help. Yet, these mostly decent people are being trampled by the system while others, are receiving help. These homeowners, they "don't qualify for" the help because they don't fit that certain "profile" so, they're caught between a rock and a hard place. The forgotten middle class!
These folk for the most part still have their dignity and want to come out ahead at the other end.
Some however, have been treated like criminals by the lenders that smiled and shook their hands once. These folk now get harassing phone calls and other menaces, etc. Undeniably, there are some of these who will damage the home to recover some of the hurt as Marcie suggests.
The vast majority, even of the homes I see in distress, are not nearly as damaged, at least not in Miami. There are plenty that are, and plenty more that are just in disrepair because at some point, the homeowner could not afford the repair (and possibly because they took that vacation or bought that Hummer instead, even though that's not what they might have said the money was going to be used for in the application - obviously, the bank also had no checks and balances to oversee this).
Many take the appliances, not because of the damage to the bank, but often because they are better than the one at the rental place they now must move to and/or because they can raise a few hundred dollars for the move or rental expenses (first, last and/or security), when their jobs are nonexistent or they're now earning a fraction of what they once did (which is what may have actually brought them to their financial and emotional knees - not an ill intent in every case as some responders make it sound like).
Before passing judement, folk need to look at all the general comments and realize that these prejudices DO NOT apply to everyone in the circumstances of our current economy.
Not to defend vandalism, but as Marcie suggests, anger is a strong emotion - one not easily tamed sometimes, specially when you yourself feel victimized and are looking for a little payback.
Is there noone out there who responded to this post not guilty of a little "payback"...ever?!?!
The type of damage found at the beginning of Marcies article, are very few and far in between compared to the vast majority (at least in MY experience), of the distressed properties I see. Some with extensive damage may have also been done by tenants that once occupied the homes (not the homeowners), even weather (as in when there is roof damage - in Miami, this can be a house's worst enemy).
Once abandoned, EVERYTHING deteriorates. Don't think so? Watch that new documentary on what will happen to everything on our planet after all humans are gone or that car or boat you no longer drive, etc.
Yet, one man's trash...another man's treasure.
In come the investors who are able to pick up these properties for 30 cents on the dollar, invest additional funds to repair and rehabilitate them, then rent and sell them back to someone else for a profit. Note, I'm not talking about a "flip" from a distressed owner (individual or institutional), to another end-user without even so much as touching the home or even to a rehabber investor.
I'm talking about the investor who trully does a service to the community when the eye-sore now looks better than the rest on the block, raising once more the standards of the street or neighborhood.
The government wants to interfere with this process with the passage of legislation that would prohibit investors from selling these properties but all that's gonna do is to stiffle the recovery process and allow these properties to sit for much longer than they need to be.
Now, we are in recovery mode.
There's been talk of a commission to study what really happened and they should do that...as long as we LEARN something, apply level headed, fair and balanced rules and regulations (and/or clean up and improve the ones that already existed that should have stopped this madness from the get go), and make sure we don't allow ourselves to get to this point again for the sake of allowing everyone the "American Dream". Not everyone should experience this as we have so painfully learned.
We now know where a misguided approach to the pursuit of this ellusive dream can take America and the world. Let's not let it happen again!
Wenceslao Fernandez Jr
Certified Distressed Property Expert
http://MiamiRealEstateKing.YourKWAgent.com
BLOG: http://MiamiRealEstateKing.WordPress.com
Twitter: http://Twitter.com/RealMiamiEstate
Miami / Miami Beach, Florida
Submitted by J. Craig Anderson on June 23, 2009 - 5:09pm.
"Have we really become so cruel and hard as a society that we can't feel any human kindness or plain sympathy for people who are in such pain that they would destroy their own home?"
When a person's life takes a serious turn for the worse, I do sympathize, even if it was their own fault. We've all made mistakes we then had to pay for down the road. While it's ultimately a learning experience, it can be devastating at the time.
Here's the problem, Marcie. Vandalism and property destruction are not valid responses to emotional pain, and we're not just being "unsympathetic" by pointing that out. Consider the insanity of the following statement:
"I'm so heartbroken and devastated, I'm going to smash the marble mantlepiece with this sledgehammer, splash WD-40 on the Berber carpet and then spread my own fresh feces all over the kitchen floor!"
Such actions are neither expressions of pain nor cries for help. They are expressions of aggression and revenge. The person who actually picks up the sledgehammer and takes a swing suffers from the exact societal detachment and "hardness" you mentioned. That the rest of us don't condone it does not make us guilty of the same.
Submitted by Marcie Geffner on June 23, 2009 - 5:27pm.
Wow. Thank you all for your excellent and thoughtful comments.
Perhaps what might be added here is that, as David Montgomery suggests, we need some solutions. I like the concept of problem-solving being brought forth in the discussion.
How can we all get past the blame and find some better solutions for the anger and emotional pain these homeowners experience? (My original point...)
Marcie Geffner
www.marciegeffner.com
Submitted by Marty Boardman on June 23, 2009 - 8:13pm.
Marcie –
I nearly lost my home to foreclosure three months ago after my business completely collapsed. I went through my savings and sold everything I could to keep my house. I also wiped out me and my wife’s retirement accounts and my daughters’ college education funds. Luckily, we were able to complete a short sale and close before the auction took place.
After 11 years as a homeowner I find myself a tenant again. But, through all of this I never felt like I needed better solutions for the anger and emotional pain I experienced. Yes, I was frustrated. I even cried a few times. However, in the end my faith and a lot of prayer carried me through.
This may not be the best solution but it worked for me.
Marty Boardman
Loan Modification Consultant
Choice Loan Consulting, Gilbert, AZ
My blog: www.freerealestateeducation.com
Submitted by Marcie Geffner on June 24, 2009 - 5:46am.
Hi Marty,
Thanks for sharing your story. As you say, your solutions might not work for everyone, but your experience is certainly a testament to the possibilities and options that might serve some people quite well.
Marcie Geffner
www.marciegeffner.blogspot.com
Submitted by Pamela Mackenzie on June 24, 2009 - 8:30am.
I'm with you, Marcie.
The amount of predatory loaning that banks committed is unconscionable. What Paul Bishop shared on 60 Minutes a few months ago is just the tip of the iceberg. And to think that these bank executives think they are still entitled to huge bonuses or salaries when they caused the economy to collapse...I'm sorry. I have no sympathy for the banks at all.
Take WAMU. Andrew Cuomo prosecuted them a few years ago for massive abuse in fixing appraisals above market value in NY. And their option ARM program was a disaster. It's no wonder the bank failed. And JP Morgan Chase bought $309 billion in WAMU assets for $1.9 billion. Now, although I am totally current on my mortgage, Chase calls me every month to find out when I am going to pay the mortgage, using some 3rd party company in India whose employees can't pronounce my name. BUT, is it possible for me to buy my mortgage back at the same discount Chase got? No, of course not. But why is it of course not? I'm not at fault here. I did not take this mortgage out to be harrassed by Chase. What happened to the slogan "The right relationship is everything?"
I have documents showing Deutsche Bank knew years before the collapse that it was coming. I have seen court papers documenting mortgage fraud committed by mortgage brokers. I have seen deals collapse because of bait-and-switch tactics by unscrupulous bankers. I could go on and on.
Until we have some moral fortitude in our banking system, nothing will be healed. And I am totally on the homeowners' side on this one.
Pam MacKenzie
Real Estate Editor
The Courier News, Home News Tribune
www.mycentraljersey.com
http://blogs.mycentraljersey.com/homefront
Submitted by Lenn Harley on June 24, 2009 - 3:18pm.
This is the descruction of property, nothing more, nothing less.
Fact is, we sell a lot of foreclosures and have rarely seen homes that have been vandalized in this matter.
I believe that the media exagerates this matter.
Lenn Harley
Broker
Homefinders.com
http://www.homefinders.com
Submitted by Stephen Adams on June 25, 2009 - 9:37am.
Marcie,
I got your original point. As you see, many people, even Realtors and Lenders too can be quite reactionary. That kind of underlines the "justified anger" of which you were speaking.
It has been quite a while since I have contributed anything to Inman myself, as, fancy that, my family and I are losing our house as well as a direct result of doing what millions of other homeowners wanted to believe, that the already unsustainable prices of homes were simply going to keep going up. As Wenceslao Fernandez Jr mentioned above, there are many agents, loan officers and others within the housing industry who leveraged all that we had in the hopes (not to victimize others) that our futures (and those of our kids') would be secured.
Again, as I mentioned, I too completely understood where you were coming from. My wife, son, large Border Collie, 2 cats and myself are living with my Mother-In-Law in a 1200 sq ft condo. It could be worse. It could always be worse. We are grateful, nevertheless. As I have mentioned from the beginning of my career in Real Estate in the middle of 2005 (yes, the top of the market), change happens. And that's okay. I see it as an opportunity to re-invent not myself (That part will always remain :-), but what I do as a career to support and take care of my family.
Yes, I could point out all the "reasons" that things broke down, my leaving the airlines (from the frying pan into the fire?), our decisions to take care of family "the traditional way", yada yada.
The bottom line is, as has also been mentioned, we signed the refinance papers. It is our responsibility and up to us to deal with life from this point on. People do need to vent, but it is unlawful to destroy that which doesn't belong to you. Come to think of it, if this is really all of God's land, who am I to try to make the decisions as to what it is really worth? Really? I'm sorry, did you mention opportunism? What about greed and envy? Might that be the real reason that "many people are angry"? If so, THAT is the root of their problem, and will be dealt with whenever they are grown up enough to go there. Hint - this usually cannot be done alone, folks.
Perhaps that it is just as well for me to hang my hat up as a Realtor and just remain a Consultant on Referral status.
Marcie, we have corresponded a few times over some of your articles, and I have enjoyed them. What's great about this particular article is that it makes you think, "why did she open herself up to so much controversy?" As someone who has done a bit of that myself, I will close this response with something I just said, "it makes you think," doesn't it?
Best of luck (and mercy) to all who have been affected by this major shift. Speaking of which, As I write this from my Apple computer, can't paradigm shifts be a good thing? This too shall pass... remember, the good things as well as the bad things. "There is a season for everything."
Regards,
Stephen Adams
www.NewPhaseRealty.com
Stephen@NewPhaseRealty.com
Submitted by Marcie Geffner on June 26, 2009 - 6:06pm.
Dear Readers,
Several days later...I am still astonished at this reaction to my column. Never did I imagine such an amazing outpouring from so many people. I certainly didn't intend to "open myself up to so much controversy," but now, I'm inspired, so please stay tuned, and keep those comments coming!
Marcie Geffner
www.marciegeffner.blogspot.com
Submitted by Ruthmarie Hicks on June 28, 2009 - 8:20am.
There seem to be more facets to this discussion than are imaginable. For those who are self-righteously opining that those being foreclosed on deserved what they got - I would say "watch out!" What goes around tends to come around. Most of those with that attitude would be stunned at how vulnerable they are to a reversal of fortune. An interesting statistic to bear in mind: 62% of all bankruptcies have to do with medical tragedy. Many of these people were actually insured but got dumped by their health care provider or reached the "limits" of coverage - which can happen all too easily.
In other words,bad things happen to good people who DID plan ahead. So don't be so pompous..you may find yourselves up the creek without a paddle and feeling mighty foolish some day.
The other thought I had is that all of this consumer -bashing is being done by many who happily sold these buyers homes they couldn't afford and loans that had so much fine print no one could read it all. That fact can indeed perpetuate the anger already being felt by many.
Let's put it this way - if I were losing my home through no fault of my own (laid off, lost health insurance etc.) and read this diatribe of self-righteous outrage from those who SOLD ME the home I no longer can afford - it might make me consider doing the very things that they berate.
I think those who choose to judge need to take a good look in the mirror.
Congratulations Marcie, for stirring the pot. I like the way you think.