S
Sam Hill
Guest
Can't Pay Your Mortgage? Trash Your House and Leave
By Scott Thill, AlterNet. Posted February 1, 2008.
As housing markets tank, "trash-outs" are on the rise, leaving owners,
lenders and banks fighting over who should pay the clean-up bill.
On the lookout for disturbing trends? Here's one for your pile: According to
a recent article in Fortune, there has been a noticeable increase in not
just fraud but arson that has kept pace with the housing depression.
Professionals in the insurance and lending industry are bracing themselves
for all manner of similar situations, as homeowners either trash, or simply
leave their trash lying around their houses, often taking off without even
claiming their furniture. This is already a dirty problem in the housing
business, with owners, lenders and banks having to figure out a way to stick
each other with the check when tenants destroy their property on their way
out the door. Woe is the person left behind to clean up the chaos.
"We just estimated a trashout yesterday where we're going to have to drain
the pool," one Fontana, CA resident posted on AgentsOnline.Net, a resource
and idea site for realtors, "and the stench from it when you enter the
backyard is overwhelming. Then, of course there are mosquitoes all over the
top and it's been sitting so long without chemicals that it's green on top
and murky black on the bottom. We've already had to refuse one pool because
of its really creepy condition and I'm not so sure about this one either.
just hope we don't find the previous homeowner at the bottom when we
drain it."
"Vacant homes attract vandals and depress property values," explained
Douglas Robinson, spokesman for NeighborWorks America, a nonprofit created
by Congress to offer financial and technical support and training for
community-based revitalization. "This negatively affects existing owners and
reduces local property tax revenues. But very few homeowners walk away,
although those who do believe that is their best option. Of course, trying
to get a loan modification so that the payments are affordable is their best
option."
As if it were that easy. Especially for those homeowners, including those
with good and bad credit, who have seen the light at the end of our current
economic crisis only to decide there isn't a house in it. In fact, one could
almost see the Wall Street Journal frown with disapproval upon reading the
title of their December 2007 piece, "Now Even Borrowers With Good Credit
Pose Risks." But the title no doubt was influenced by the comments of Bank
of America CEO Kenneth Lewis in the piece itself. It seems that Lewis, whose
company recently bought the housing meltdown's poster boy for bad lending,
Countrywide, for $4 billion in stock, nevertheless feels confounded that
customers of questionable loans would simply choose to abandon ship, er,
house. "There's been a change in social attitudes toward default," Mr. Lewis
told the Journal. "We're seeing people who are current on their credit cards
but are defaulting on their mortgages. I'm astonished that people would walk
away from their homes." While Lewis may scratch his head in disbelief,
employees of the bank Wachovia have an explanation that might work for him:
Homeowners have crunched the numbers and decided their houses are worth less
than their mortgages. According to a recent conference call, many of
Wachovia's current losses in California are originating not from subprime
buyers fallen on financial hardship, but from homeowners who can pay their
cleverly structured loans but are just choosing a different fate. "They've
been from people that have otherwise had the capacity to pay," a Wachovia
spokesperson said on the call, "but have basically just decided not to
because they feel like they've lost equity, value in their properties. It's
hard to know right now, but we may have seen somewhat of an acceleration
problem
By Scott Thill, AlterNet. Posted February 1, 2008.
As housing markets tank, "trash-outs" are on the rise, leaving owners,
lenders and banks fighting over who should pay the clean-up bill.
On the lookout for disturbing trends? Here's one for your pile: According to
a recent article in Fortune, there has been a noticeable increase in not
just fraud but arson that has kept pace with the housing depression.
Professionals in the insurance and lending industry are bracing themselves
for all manner of similar situations, as homeowners either trash, or simply
leave their trash lying around their houses, often taking off without even
claiming their furniture. This is already a dirty problem in the housing
business, with owners, lenders and banks having to figure out a way to stick
each other with the check when tenants destroy their property on their way
out the door. Woe is the person left behind to clean up the chaos.
"We just estimated a trashout yesterday where we're going to have to drain
the pool," one Fontana, CA resident posted on AgentsOnline.Net, a resource
and idea site for realtors, "and the stench from it when you enter the
backyard is overwhelming. Then, of course there are mosquitoes all over the
top and it's been sitting so long without chemicals that it's green on top
and murky black on the bottom. We've already had to refuse one pool because
of its really creepy condition and I'm not so sure about this one either.
just hope we don't find the previous homeowner at the bottom when we
drain it."
"Vacant homes attract vandals and depress property values," explained
Douglas Robinson, spokesman for NeighborWorks America, a nonprofit created
by Congress to offer financial and technical support and training for
community-based revitalization. "This negatively affects existing owners and
reduces local property tax revenues. But very few homeowners walk away,
although those who do believe that is their best option. Of course, trying
to get a loan modification so that the payments are affordable is their best
option."
As if it were that easy. Especially for those homeowners, including those
with good and bad credit, who have seen the light at the end of our current
economic crisis only to decide there isn't a house in it. In fact, one could
almost see the Wall Street Journal frown with disapproval upon reading the
title of their December 2007 piece, "Now Even Borrowers With Good Credit
Pose Risks." But the title no doubt was influenced by the comments of Bank
of America CEO Kenneth Lewis in the piece itself. It seems that Lewis, whose
company recently bought the housing meltdown's poster boy for bad lending,
Countrywide, for $4 billion in stock, nevertheless feels confounded that
customers of questionable loans would simply choose to abandon ship, er,
house. "There's been a change in social attitudes toward default," Mr. Lewis
told the Journal. "We're seeing people who are current on their credit cards
but are defaulting on their mortgages. I'm astonished that people would walk
away from their homes." While Lewis may scratch his head in disbelief,
employees of the bank Wachovia have an explanation that might work for him:
Homeowners have crunched the numbers and decided their houses are worth less
than their mortgages. According to a recent conference call, many of
Wachovia's current losses in California are originating not from subprime
buyers fallen on financial hardship, but from homeowners who can pay their
cleverly structured loans but are just choosing a different fate. "They've
been from people that have otherwise had the capacity to pay," a Wachovia
spokesperson said on the call, "but have basically just decided not to
because they feel like they've lost equity, value in their properties. It's
hard to know right now, but we may have seen somewhat of an acceleration
problem