Stripping Down the House
September 12, 2010 10:54 AM Subscribe

Before they foreclose on your house why don't you get back at the bastards by stripping the place. There are consequences. "Lawyers who represent people facing foreclosure advise them that whatever's nailed down generally stays with the house."
posted by Xurando (137 comments total) 1 user marked this as a favorite

Two wrongs don't make a right.
posted by QuarterlyProphet at 11:08 AM on September 12, 2010

"Place" link.

Anyway, I find it hard to have sympathy for people who are pissed at the home-strippers. Some copper wiring, a few leaded windows and a toilet can pay for a good chunk of a family's first/last/security on the studio they'll be living in after being foreclosed on. The banks? Fuck the banks. Predatory lending wasn't exactly happening via back alley handshakes with twitchy mobsters.
posted by griphus at 11:10 AM on September 12, 2010 [8 favorites]

Alonzo Patterson - On July 10, 2009 a jury convicted Patterson of Burglary, a class 4 felony; and Possession of Burglary Tools, a class 6 felony. On February 13, 2009 Phoenix Police caught Patterson stealing the copper piping out of a vacant home in Phoenix. He told officers he intended to sell it for scrap. He was sentenced to 10 years in prison on August 28, 2009.

10 years for stealing copper pipe and having tools? Yikes, that is crazy.
posted by a womble is an active kind of sloth at 11:16 AM on September 12, 2010 [8 favorites]

Anyway, I find it hard to have sympathy for people who are pissed at the home-strippers. Some copper wiring, a few leaded windows and a toilet can pay for a good chunk of a family's first/last/security on the studio they'll be living in after being foreclosed on. The banks? Fuck the banks. Predatory lending wasn't exactly happening via back alley handshakes with twitchy mobsters.

This is an appealing but deeply flawed argument. Why does the responsibility for entering into these unwise contracts rest solely on the bank? As you say, there weren't any mobsters forcing people into it. What happened, as unromantic as this interpretation is, is that people bought houses they couldn't afford and used that fact as justification for stealing. It's no more defensible than stealing from any wealthy individual or group when you're having a tough time. That is: it's the wrong thing to do, even if it does pay next month's rent.
posted by roast beef at 11:24 AM on September 12, 2010 [11 favorites]

Fine then, one wrong doesn't make a right. Whatever. It still seems like it's not a great idea.
posted by koeselitz at 11:25 AM on September 12, 2010

"10 years for stealing copper pipe and having tools?"

With the average cost of incarceration being a bit over $25,000 per year, that's a quarter of a million dollars worth of copper (going for about $3.15 per pound at the scrap year). He must have hauled about 79,000 pounds of it out of that house to make that 10 years worthwhile.

Must have had a LOT of toilets!
posted by HuronBob at 11:25 AM on September 12, 2010 [7 favorites]

Now that I think of it, they could have taken the cost of incarceration, applied about half of it to his mortgage to get it into a reasonable range, let him stay in the house and it would have been a win(bank), win(homeowner), win(government costs) for everyone.
posted by HuronBob at 11:27 AM on September 12, 2010 [21 favorites]

Pre-foreclosure stripping: Taking your sense of entitlement to its bitter and predictable end.

There are lots of people losing their homes for really sad, awful reasons. Maybe they got sick or injured, or were unexpectedly laid off and didn't have anything in the way of savings. There are also a lot of people who bought giant plywood McMansions with nothing down and then couldn't make the $5,000 note—probably knowing well ahead of time they couldn't pay it.

People in the first group don't have time for this petty bullshit; they have to find someplace to live and a way to make ends meet. People in the second group have all the time in the world to orchestrate this kind of nonsense, and have their brother-in-law wheel around his Escalade so they can stuff the whirlpool into it. After all, those "fucking banks" who manipulated them—gun to head—into signing the loan "deserve" it.

I'm so liberal I have to look to my right to see Lenin, but this is just asinine behavior regardless of your party affiliation or how bloody your heart is; no one owes you a house.
posted by littlerobothead at 11:27 AM on September 12, 2010 [48 favorites]

I've read stories like this before, but the part about houses without kitchens not being eligible for traditional loans is new to me. It makes sense, but I'd never really considered that aspect before. Not that I was terribly sympathetic with the strippers beforehand, but this makes me less so. You're putting the house in a condition where it can't easily be bought by anyone other than cash-paying investors, and that's not good for the stability of the neighborhood.
posted by Salieri at 11:28 AM on September 12, 2010 [2 favorites]

I find it hard to have sympathy for people who are pissed at the home-strippers.
Sure, until some home-stripper who's looking for some copper piping rips out a gas line and ignites a blaze that burns down half the block. But, y'know, fuck the banks and all that shit.
posted by Guernsey Halleck at 11:34 AM on September 12, 2010 [3 favorites]

Pre-foreclosure stripping: Taking your sense of entitlement to its bitter and predictable end.

I am comfortable wagering that desperation, terror & misery outnumbers a sense of entitlement in 98 out of 100 of pre-foreclosure stripping situations.
posted by phearlez at 11:35 AM on September 12, 2010 [13 favorites]

"The person is lowering my property values by taking stuff out," Clarke said. "The house is worthless next door now"

See, the real victim isn't the guy losing his house (which maybe he couldn't afford in the first place and never should have signed that mortgage). And it isn't the bank, which is just trying to enforce an agreement that the homeowner entered into freely (though perhaps after a deceptive sales pitch or other shady business practice). It's the innocent owner next door, whose god-given right to steadily increasing property values is being rudely trampled.
posted by layceepee at 11:37 AM on September 12, 2010 [13 favorites]

I still have trouble figuring out how the part where you don't get to keep the house you're not paying for is a wrong.

... and I have a hard time figuring out how giving adjustable-rate "Ninja" mortgages to people who can't possibly afford to pay them once the submarine terms kick in is a right.

"Washing one's hands of the conflict between the powerful and the powerless means to side with the powerful, not to be neutral." - Paulo Freire
posted by mhoye at 11:38 AM on September 12, 2010 [14 favorites]

HuronBob: Now that I think of it, they could have taken the cost of incarceration, applied about half of it to his mortgage to get it into a reasonable range, let him stay in the house and it would have been a win(bank), win(homeowner), win(government costs) for everyone.

Unfortunately, three wins, too often, don't make a right either. As is often the case when the aforementioned sense of entitlement or banks or the government gets involved. All three seems like a guarantee to fail.

My initial instinct is that a post that could see multiple uses of the phrase "home-stripping" would be a lot more pleasant.

The fact that my mind works that way proves
(a) my maturity level.
(b) why I'm renting again.
posted by MCMikeNamara at 11:41 AM on September 12, 2010

You're putting the house in a condition where it can't easily be bought by anyone other than cash-paying investors, and that's not good for the stability of the neighborhood.

What makes you think that those doing the stripping care about the neighborhood. They probably didn't even talk to their neighbors in the 3-5 years they were there.

This is fairly common in the foreclosure-ridden areas of the country (the West, predominately).

From what I understand, its not illegal to strip the house before its foreclosed (but while you're still not making payments). There was a local case where a guy had stripped everything out of his house and had a huge garbage pile in the backyard. Neighbors complained to the city and local news media, but nothing could be done - it was still his house and there was nothing anyone could do about it.
posted by SirOmega at 11:41 AM on September 12, 2010

I'm thisclose to foreclosing and would never think of stripping my property. I wouldn't even take the microwave, stove and/or fridge. What the fuck goes through someone's head that gives them a sense of entitlement to copper wiring? Throw the book at these dickbeards.
posted by KevinSkomsvold at 11:41 AM on September 12, 2010 [3 favorites]

It's all timing I guess. If you strip the house and it's not in foreclosure it's still "your" stuff, after proceedings have begun, not so much. If you're current on your mortgage but planning on sending the bank some "jingle mail" and walking away it's an ethical coin toss.
posted by MikeMc at 11:46 AM on September 12, 2010 [1 favorite]

What makes you think that those doing the stripping care about the neighborhood.

I don't think they care. Just explaining why I have a problem with it.
posted by Salieri at 11:49 AM on September 12, 2010

From the last link:On April 24, 2008 the defendant was arrested by Phoenix Police for allegedly stealing copper tubing and wires from a vacant home in Phoenix. The walls of the home were severely damaged and the damage estimate is more than $14,000.

This is the part that really bugs me. Some dude is so intent on stealing $100 worth of copper, that he causes 100 times that much damage. I don't believe any of the twisted logic that justifies people stealing from banks or others who own the house they lived in, but this kind of selfish, destructive behaviour is on another, entirely indefensible, level.
posted by ssg at 11:51 AM on September 12, 2010 [2 favorites]

"This is the part that really bugs me. Some dude is so intent on stealing $100 worth of copper, that he causes 100 times that much damage."

Cocaine is a helluva drug...
posted by MikeMc at 11:55 AM on September 12, 2010

Why does the responsibility for entering into these unwise contracts rest solely on the bank?

Because the bank is expected to have a level of expertise and professionalism that makes them much more responsible for a loan decision. All the more so when they promote the loan as a good and manageable financial decision, aka lying their asses off.
posted by five fresh fish at 12:08 PM on September 12, 2010 [19 favorites]

Hey, I paid for those granite countertops and they will totally upgrade my campsite down by the river.
posted by Iron Rat at 12:11 PM on September 12, 2010 [7 favorites]

It seems to me that there are different standards at play. Mild stripping as in taking appliances doesn't seem like that big of a deal to me. Ripping wiring out, however, does come across as wrong. It would seem that damaging the house is the limiting feature. If you don't actually damage anything, then the ethical concerns are much milder (or perhaps disappear entirely).

Also, there are many different levels of culpability at play. Some people knew exactly what the risks where, ignored them and now are facing the consequences of their foolhardiness. It's hard to see how they can justify stripping a home. Some people looked to their realtors and banking agents as experts and depended on their sound advice. In the latter case it's really hard to see how the borrowers did anything wrong. Indeed it's easy to see how they were betrayed and treated very badly. These people, it seems to me, have every right to recoup what value they can from their property (without causing property damage, of course).
posted by oddman at 12:15 PM on September 12, 2010 [1 favorite]

five fresh fish: Yes, anyone going on about how the banks and consumers (not that I'm saying that none share any blame, especially the McMansion-ey types who were a minority in the whole National Shame, to my understanding) share the blame equally really needs to read The Big Short by Michael Lewis. It's not an ideological objection to personal responsibility talk I have here--not at all. The banks did have more of the burden, from a professional standpoint, and they failed us all in order to keep themselves growing in go-go fashion in an era of greater competition and a changing economy. The main reason so many are out of work right now is ... well, what they did. Educate yourself.
posted by raysmj at 12:29 PM on September 12, 2010 [5 favorites]

I kind of assume the people doing this are the greedy people who bought more house than they could afford or refinanced a home so they could buy jetskis.
posted by snofoam at 12:34 PM on September 12, 2010

HuronBob, you know that rational and sensible arguments are not permitted in the USA! USA! USA!. We tolerate that kind of stuff here on MetaFilter, but you know what will happen if you trot that sttuff out in public.
posted by Xoebe at 12:46 PM on September 12, 2010

If there was respect for the way the banks did their business, there might be more respect directed back at them when things go sideways.
posted by weezy at 12:52 PM on September 12, 2010 [1 favorite]

Educate yourself.

you forgot "sheeple"
posted by found missing at 12:52 PM on September 12, 2010 [2 favorites]

I kind of assume the people doing this are the greedy people who bought more house than they could afford or refinanced a home so they could buy jetskis.

Yeah, they're in it with the welfare queens and anchor babies!
posted by Pope Guilty at 1:00 PM on September 12, 2010 [12 favorites]

10 years in prison for stealing a few copper pipes is suggesting that our society is dangerously close to "resource-scarce post-apocalyptic SciFi dystopia" that we always imagine ourselves in after The Great Oil War or whatever.

And, as always, it's not as cool in real life as when it's on the silver screen.
posted by Avenger at 1:01 PM on September 12, 2010 [6 favorites]

layceepee: the innocent owner next door, whose god-given right to steadily increasing property values is being rudely trampled

Who said anything about that? What's going on here is a decrease in neighborhood property values- why on earth is being pissed about that "entitlement"?

I'm fairly surprised at the "screw the banks" attitude people are taking toward this. Setting aside questions of what kind of mortgages are at stake here, the banks aren't the ones who feel the impact of this, it's the neighbors.
posted by mkultra at 1:01 PM on September 12, 2010 [3 favorites]

I wouldn't even take the microwave, stove and/or fridge.

What?
posted by two or three cars parked under the stars at 1:03 PM on September 12, 2010 [1 favorite]

What empathy I have for folks removing items comes from some personal experience. Back in the hay-day of easy loans, I was once told by a rep for one of the largest mortgage companies in the state, "don't worry about that balloon payment, this is a cheaper loan, and, when the balloon comes due, we'll refinance you without a blink".

I trusted this company, this was my third loan with them over the years. I was lucky in that, getting a bit nervous WAY before the shit hit the fan, I found a conventional loan at a good rate, and I'm still in it.

Folks were deceived, lied to, led down crappy paths by salespeople working for commissions.

I guess I understand how, in some cases, folks feel justified in removing as much as they can.

Now, as for those folks that knew what they were getting into, and those damaging the house in spite, that may be a different story.
posted by HuronBob at 1:05 PM on September 12, 2010 [7 favorites]

And if we ARE living in crazy dystopia-land, everybody on MeFi needs to learn their favorite branch of Science inside and out, STAT. That way we'll have mastered the Forbidden Magic of the Ancient Ones once it comes time to sacrifice gila monsters to The Cheney.
posted by Avenger at 1:06 PM on September 12, 2010 [4 favorites]

Just because you can't take anything out of it doesn't mean you can't cut thru the walls with a sawzall and sever the pipes, cut all the wiring into smithereens, or in a thousand ways monkeywrench it all to hell in unseen ways.
posted by nevercalm at 1:08 PM on September 12, 2010

Setting aside questions of what kind of mortgages are at stake here, the banks aren't the ones who feel the impact of this, it's the neighbors.

No, it's the people who find themselves homeless after having been preyed on by techniques like the ones HuronBob just describes. They do not deserve the right to fleece the unwary because most people do not understand, nor were ever asked or encouraged to understand, how a mortgage more complicated than "borrow money for X years at Y percent" works.
posted by griphus at 1:11 PM on September 12, 2010 [2 favorites]

"They" being the banks, not the borrowers.
posted by griphus at 1:12 PM on September 12, 2010

Yeah, what a lot of people saying "they deserve what they got because they knew what they were getting into" don't seem to realize is that, in many, many cases -- no they didn't. The banks *lied* to them. Outright lied. Told them one thing, then handed them a confusing contract written in jargony legalese that said something completely different.

Yes, of course you should never sign a contract that you don't understand completely ... And I'm sure this is something you've never, never done, and that you read every use agreement for every piece of software you've ever gotten in full before clicking "I accept".

Naturally a home loan is more important than that. But for a lot of folks, when they're handed a contract that basically says "glibber glibber glibber glibber", and the professional person at the bank who wrote it says, "that means X", they believe them. They assume it's the banker's job to explain things to them for both of their benefits, not to screw both of them over.
posted by kyrademon at 1:15 PM on September 12, 2010 [12 favorites]

There's another actor in all this mess, also. I realized it when I took the most important class I've ever taken in high school. It wasn't algebra, or college prep english. It was accounting. Mind you, I just took this class for credits. This class isn't required at all. My accounting class was in a shop, on the outskirts of campus, farthest away from the main building. You went to it, auto shop, and then walked past it 100 feet into the woods surrounding the school. IMHO, this class should have been required...and right down the math wing of the school alongside the algebra and geometry and calc classes. And people actually have the nerve to blame others for being ignorant. Of course they are, its in the design.
posted by FireballForever at 1:24 PM on September 12, 2010 [5 favorites]

Pre-foreclosure stripping: Taking your sense of entitlement to its bitter and predictable end.

Oh, won't somebody think of the Massive Corporate Banking Structure?!?!
posted by peppito at 1:33 PM on September 12, 2010 [9 favorites]

"What happened, as unromantic as this interpretation is, is that people bought houses they couldn't afford and used that fact as justification for stealing."

Houses they couldn't afford, maybe. But I bet they could afford the fixtures.
posted by klangklangston at 1:35 PM on September 12, 2010 [1 favorite]

If a house is going into foreclosure, it would take a semi-educated high-school grad-type of employee about 1 hour to go through the house with video and still cameras to document the current state of the house. Which would give them proof when a disgruntled foreclosee rips stuff out. But they're apparently too lazy to prosecute.

And banks are apparently too lazy to put proper security on a foreclosed and vacant property, or to put a renter in there.

Yet another reason why banks are still lazy fuckers. Not necessarily evil, but OMG they're lazy. Lazy and cheap.
posted by Artful Codger at 1:53 PM on September 12, 2010 [2 favorites]

Yeah, they're in it with the welfare queens and anchor babies!

I just wanted to note that while the story of welfare queens driving Cadillacs may have been overstated, there are literally reams of data showing that Americans used their houses like ATMs to extract cash for an unaffordable lifestyle. And while welfare may only be relevant to a small segment of the population, mortgage equity withdrawal was widespread across the nation and across income brackets.

To suggest otherwise (or comparing it to such a trivial matter like anchor babies) shows a gross misunderstanding of our current financial crisis. Consumers may not be "mostly" to blame (largest targets like the banks, the Fed, predatory mortgage lenders and Fannie/Freddie are still out there), but banks certainly didn't force people to lie on their applications - market forces like an extremely hot market and monster year over year returns helped that.
posted by SeizeTheDay at 2:00 PM on September 12, 2010

Completely agree that it's wrong to strip a house of anything, once it's foreclosed.

Questions:

Why aren't any bankers doing serious jail time for deceiving the public on a massive scale?

Why have loan modification programs not lived up to the commitments expected of them, with no administrator of any one of those programs, at any bank, doing jail time for failing to deploy public money, as ordered?

Why it it suddenly "legal" for banks to fleece the American public with a whole new set of fees, to make back the losses that they caused for themselves?

Why haven't any bankers been completely stripped of all their property (forget Bernie Madoff, because Madoff was not a banker).

Why has no newspaper - that I know of - publicly listed the names of all bankers (especially CEO's and senior administrators) who participated in this charade?

And so on...
posted by Vibrissae at 2:15 PM on September 12, 2010 [5 favorites]

None of this is new. In the early 90s there was a recession during/after what was a tremendous bubble in SoCal real estate. During one particularly bleak period in the early 90s, as thousands of 5 year balloon notes were coming due, homes were getting foreclosed on at a (then) record rate. From Orange County up through Lancaster, the papers were filled with stories of the banks coming in to find that the commode was removed and a sack of Quick-crete was poured down the soil stack.

I understand the populist hatred toward the banks--my sympathies largely lie there. However, I have lived in a small co-op owned townhouse for a quarter century because I live my beliefs that are anti-entitlement. When some friends bought homes under the zero-down, don't worry bout it now ARM's, they tried to encourage us to join them. NFW. I couldn't see how it made sense if the interest went up a point, or if either of us lost any income.

The "home wreckers" by and large aren't the people on the margins who bought starter homes on ARMS and now are the newly homeless--they are the ones as in the Oakland Press article with the McMansions, who bought hard into the capitalist dream that if they just did their job and stimulatd demand enough the circle would just keep expanding. To them, I say "too bad, so sad."

Oakland County, despite Michigan's problems has one of the highest per capita incomes in the nation. People of Pontiac, MI, one of the poorest locales in Oakland County isn't where these home strippings are occuring--other than, of course, the hard core addicts who are stripping anything they can find off any thing to buy a little somethin, somethin.
posted by beelzbubba at 2:17 PM on September 12, 2010 [1 favorite]

Amateurs compared to some Glasgow "midnight flit" artists that a family friend who was a bailiff had to deal with:

ball peen hammer through ever drywall panel
electrical conduits cut through with shears on every level
radiators, water pipes and gas pipes drilled through
window sills drilled through to crack all the panes
cement and rubble flushed down the toilets and drains
electrical panel shorted out with 6" nails
used sump oil poured on every carpet and hardwood floor

... and those were the ones he'd mention in polite company.
posted by scruss at 2:18 PM on September 12, 2010 [1 favorite]

Yet another reason why banks are still lazy fuckers. Not necessarily evil, but OMG they're lazy. Lazy and cheap.

Agree to a point, which needs to be exceeded, as follows:

Yet another reason why banks are still lazy fuckers. Not necessarily evil, but OMG they're lazy. Lazy and cheap, and criminal.

We're talking about an enterprise sector where the leaders in that sector, collectively, caused more harm to American (and worldwide) asset base than probably all the common thieves that have been incarcerated in the entire history of American incarceration.

Now, aside from asset loss, just think about the cost to human capital, and human lives - families destroyed, suicides, displacement on a massive scale, educations lost, jobs lost, futures burdened for decades, and so on. Yet these lazy, cheap, and criminal individuals (and I'm talking here about the *leaders* in the financial enterprise sector - at least a significant minority of them - have walked, with nothing more than a slap on the wrist. Why? Other than they've been able to influence and buy their way out to a degree where many are back pulling even worse scams, today.

America is in deep, deep trouble - and we're going to be hurting for at least the next 10-15 years, before we are on a true recovery path.

My wish for all those at high levels who colluded to make this happen? A pox on you and everything you own.

My wish for those victimized by this outrageous hubris? Don't trust anyone who says "trust me", ever, especially when it comes to your financial and social welfare.

Americans has better start looking in the mirror, and begin to recalibrate the out-sized desire for material well-being that they have been brainwashed into wanting. I hope it's not too late. I don't think it is.

-
posted by Vibrissae at 2:26 PM on September 12, 2010 [3 favorites]

The "home wreckers" by and large aren't the people on the margins who bought starter homes on ARMS and now are the newly homeless--they are the ones as in the Oakland Press article with the McMansions, who bought hard into the capitalist dream that if they just did their job and stimulatd demand enough the circle would just keep expanding. To them, I say "too bad, so sad."

Yeah, they were ignorant, or stupid, or greedy, or all three. That said, banks *enabled* this behavior; they created financial and investment memes. You think banks don't understand (or study) cognitive trends, preferences, mass behavior, etc. etc.? They do, and they use that information and the filthy lucre paid to their legislative whores to create *legal theft*.

It makes me laugh when I hear condescending comments made about how one needs to bribe one's way to success in other cultures, and how that isn't necessary in America, because everything is so transparent. Bullshit.
posted by Vibrissae at 2:30 PM on September 12, 2010 [2 favorites]

The banks *lied* to them. Outright lied. Told them one thing, then handed them a confusing contract written in jargony legalese that said something completely different.

That is what TILA and RESPA is for.

Find the fraud in the contract. Take it to court and demand the TILA/RESPA fines.

America is in deep, deep trouble - and we're going to be hurting for at least the next 10-15 years,

Chickens/roosting, the end of the cheap energy model the US of A infrastructure is built on, .... 15 years is optimistic all pulling together and in the same direction.
posted by rough ashlar at 2:31 PM on September 12, 2010

Californian's live in their own personal ATM machines:

* The owners of today's featured property paid $441,000 on 4/25/1991. I don't have their original mortgage information, but it is likely that they put 20% down ($88,200) and borrowed $352,800.
* On 5/27/1997 they obtained a stand-alone second for $50,000.
* On 12/7/1998 they refinanced their first mortgage for $387,500.
* On 3/26/1999 they got a $47,500 stand-alone second.
* On 12/28/2000 they refinanced with a $441,000 first mortgage and crossed the threshold of borrowing more than they paid.
* On 3/31/2004 they refinanced with a $536,250 first mortgage.
* On 10/5/2004 they obtained a $628,000 first mortgage.
* On 11/30/2005 they refinanced with a $686,250 Option ARM with a 1.5% teaser rate.
* On 5/3/2007 they obtained a second mortgage for $15,764.
* On 7/3/2007, after witnessing the above patter of serial refinancing, World Savings Bank brilliantly loaned them $788,000 in an Option ARM.
* Total property debt is $788,000 plus negative amortization and missed payments.
* Total mortgage equity withdrawal is $435,200 including their down payment.
posted by 445supermag at 2:38 PM on September 12, 2010

To suggest otherwise (or comparing it to such a trivial matter like anchor babies) shows a gross misunderstanding of our current financial crisis. Consumers may not be "mostly" to blame (largest targets like the banks, the Fed, predatory mortgage lenders and Fannie/Freddie are still out there), but banks certainly didn't force people to lie on their applications - market forces like an extremely hot market and monster year over year returns helped that.

I didn't lie on my application when I refinanced a few years ago but the costs were certainly much higher than I'd been told they would be. And then I lost my job, and have been able to hold onto my house only because of a nonprofit organization that assists this particular company's former employees. Count me amongst the people who had planned to--note, did not--use my house's value to pay for my kid's college costs because that's what EVERYONE around me was doing. So now I am erratically employed, have a bigger mortage than I can afford (but I am not underwater) and haven't got a cent for college. I didn't use money for vacations, fancy cars or anything else but it would have come in handy for school. If I hadn't refinanced when I did, I would have paid off the house by now but the roof would have fallen in, quite literally, and, of course, I ended up refinancing instead of just borrowing, to my regret.

As far as people stripping homes, I think the timing is everything. It's yours until the court says it isn't. Then you need to stop. Some of this damage is just plain rage or vandalism.
posted by etaoin at 2:55 PM on September 12, 2010 [1 favorite]

There is nothing ethically or morally questionable about selling copper wiring or piping, windows, or appliances that you legally own. If in a few months the mortgagee legally owns them, it is wrong to steal.

Quite a few people in this thread seem to think lots of people knowingly took out loans they knew they couldn't afford. I don't know anyone that did that. But I do know quite a few people that took out loans only to watch a quarter of the houses in their neighborhood go into foreclosure because residential real estate became impossible to sell and 5-year ARMs became impossible to refinance. When your house is worth half of what you owe, you can either keep paying if you're happy there or cut your losses and let the bank have it. The mortgagee knew that was the risk all along. You can be damn sure that the mortgagee isn't going to renegotiate payments to cut their profits.

The strippers just might make the banks figure out that it is cheaper to write down mortgages for those that will pay closer to market value instead of foreclosing on basically worthless properties. But it is unlikely as long as the banks and their insurers can just cry to their former cronies and Uncle Sam will come running to bail them out again.
posted by McGuillicuddy at 3:07 PM on September 12, 2010 [1 favorite]

Why aren't any bankers doing serious jail time for deceiving the public on a massive scale?

You'll understand the answer to that once you puzzle out why the public also paid to bail them all out of the massive holes they got into with this chicanery.

Seeing as Congress voted to give them all that public money, it should take you about 3 seconds to gain clarity.
posted by zoogleplex at 3:09 PM on September 12, 2010 [1 favorite]

Also, if a house is stripped badly enough, it can be declared uninhabitable, and certificate of occupancy can be revoked, IIRC.

That means it's not *legally* a house anymore, at least until it can be put back up to code.

Borrowing a lot of money on a house and then giving back something that's no longer a house when you default could be seen as problematic.
posted by zoogleplex at 3:13 PM on September 12, 2010

Stripping Down the House

"And you may say to yourself: 'This is not my beautiful house!!'"
posted by Greg_Ace at 3:14 PM on September 12, 2010 [6 favorites]

And banks are apparently too lazy to put proper security on a foreclosed and vacant property, or to put a renter in there.

Or they may not even foreclose. A few seconds with google will turn up stories about banks refusing to foreclose on drastically overdue property because of concerns about carrying it on their balance sheet. It's tempting to say "lucky (former) homeowner" but this has resulted in a lot of derelict properties in neighborhoods, increasing crime rates and/or making it impossible for other residents to sell and for municipalities to collect fees/taxes.

After all, once a home owner flees into the night because the bank says they're going to foreclose, who do you go after for those taxes and fees and fines? The bank says nope, not us - we haven't foreclosed yet. The home owner has gone on to other things.

I'm not defending folks who strip the houses but I'd wager the banks have done far more damage - and extended the recovery/adjustment - far more than they ever have. And they've done so by looking out exclusively for their own interests regardless of anyone else's... the same offense as the strippers.
posted by phearlez at 3:46 PM on September 12, 2010 [2 favorites]

If a house is going into foreclosure, it would take a semi-educated high-school grad-type of employee about 1 hour to go through the house with video and still cameras to document the current state of the house.

"Knock knock! I'm here from the bank that's about to take your home away. Mind if I come inside and take some pictures?"
posted by griphus at 3:46 PM on September 12, 2010 [1 favorite]

A lot of good points are made here. First, stripping a house that is being foreclosed on, or is about to be foreclosed on, is just a shitty fucking thing to do. Desperation or not. If you need the $100 that badly, go work at McDonald's or stand in line for food stamps.

And "the bankers" did set up a situation where there was no liability for anyone to check the numbers too closely. I don't think they did it on purpose, it just worked out that way. But there are many, many banks out there that did do the right things and acted like banks and they are doing fine. The banks that failed were *by definition* doing it wrong. A bank almost can't fail if it is doing everything right.

The failure was that nobody saw the bubble until it was too late. The bankers who said "just refinance in 5 years" weren't lying. They just were guilty of not being able to read the future, and not being able to see a bubble from inside of it. If they really were *lying*, don't you think they wouldn't have lost all that money when it all came crashing down?

But you know what? Nobody forced these people to sign the paperwork. I'm not sure how many of the people here have been to a real estate closing. There are dozens of papers that you have to sign, and many of them have very large numbers on them, and there is one that says exactly how much money you have to pay every month until it is over. If I'm buying something for $200,000, and I have to pay $750 every month for five years and then I have to pay $225,000, goddamned right I'm not signing it.

I have empathy for the people who have been screwed by the bubble popping, I bet it sucks really hard for that to happen. But I have no sympathy for many of them, because at the root of it all, they were being greedier than they were smart, and that almost always leads to ruin.
posted by gjc at 3:50 PM on September 12, 2010

This goes way beyond predatory lending. There are people that for a variety of reasons (marriage, relocation, etc.) need to sell their house, and even with a best-effort attempt to sell, simply can't. There are plenty of others who can't afford the mortgage any longer because...they are no longer employed. The mortgage company will only cooperate for so long and then they want money or they want the house. It's not unreasonable.

I am in the first group. In my town of roughly 40,000 people, there are 750 houses for sale. No reason anyone should pick mine over any other ones - it's nice enough and it's been shown and it's priced well below what's reasonable, but it's a buyer's market. Buyers can and do get what they want. Now I'm pretty much at the point where I have to call the bank and ask, after 120 days of the house being on the market, where they want me to mail the keys.

I was bitter about a month ago. Now I'm resigned. I do not want the cool antique light fixture from the dining room or the super-cool gas range from the kitchen. I don't want the newer dishwasher I replaced myself because the one that came with the house went kaput. I just want to rip the band-aid off and be done with the whole mess. I never thought it was possible to pass through all the stages of grieving over a house, but it is. Especially when it was a cool house and a first-time home purchase. And the only house my daughter knew from the ages of 20 months to five years-all of her life that she's able to remember with any real clarity.
posted by PuppyCat at 3:58 PM on September 12, 2010 [2 favorites]

If you need the $100 that badly, go work at McDonald's or stand in line for food stamps.

I am sick of hearing this. Good luck if you're in your late 50s and trying to find work at a place that knows you're so overqualified that it's a joke, or you're at least twice the age of the person doing the hiring. As far as food stamps--I'm told I'm not eligible because I get the equivalent of $180 a week for rental income on a small apartment in my house. My mortgage is $1,900 a month.

My unemployment benefits of less than a quarter of what I used to make ran out last week.

Please, everyone, spare me the moralizing about what you will do when you're desperate. When the top one percent of our society stops collecting 25 percent of the country's wealth, I'll worry about whether taking the appliances is a bad thing to do.
posted by etaoin at 4:00 PM on September 12, 2010 [34 favorites]

You'll understand the answer to that once you puzzle out why the public also paid to bail them all out of the massive holes they got into with this chicanery.

Seeing as Congress voted to give them all that public money, it should take you about 3 seconds to gain clarity.

Please make your point, because I'm sure my conclusions are going to be different from yours. Sideways implications aren't helpful.

But to the point, they did it because public confidence in the banking system was teetering on the brink of total financial meltdown. Had they not acted, there was a very real chance we were going to in a 1930's sort of situation. Widespread deflation is a very bad thing. And that's not even the least of it- lots of people literally starved to death during the Great Depression. Nobody plants corn if they think they are going to get less for it at market than they paid for the seeds. If avoiding that means bailing out the bad guys, I'm all for it.

Please remember: the money supply lost TRILLIONS of dollars in a couple month period. That is very hard to get out from under, and if a slow recovery is all we have to show for it, I call that a win.

Maybe they were wrong, or they were right for the wrong reasons, but it doesn't matter. It is done, and we aren't living in abject poverty.
posted by gjc at 4:01 PM on September 12, 2010

Have you listened to Giant Pool of Money, gjc?

Mortgage brokers were walking around East Flatbush, knocking on doors, telling just about anybody: Hey, we can get you a house. If you have a house, we can get you a big home equity line of credit. This happened in poor neighborhoods all over the country. And, while the FBI and other law enforcement folks, say they don't have the exact numbers, it's clear that fraud--like the fraud on Richard's application--was ubiquitous.

Ignorance illegally harvested for profit, no responsibility attached.
posted by griphus at 4:03 PM on September 12, 2010 [1 favorite]

Why not strip the house and sell all the crap in it before you get foreclosed on? Sheesh, you all make it sound so complicated.
posted by Xoebe at 4:06 PM on September 12, 2010

gjc, I encourage you to read The Big Short. You just need to look further up the food chain.

gjc: There are dozens of papers that you have to sign, and many of them have very large numbers on them, and there is one that says exactly how much money you have to pay every month until it is over.

I hear ya, but you and I got (I assume) fixed interest loans where the numbers made sense. We didn't have a broken waving off the suddenly large number with a soothing, "and you'll refinance before then down to a lower rate".

(Not to defend any of this stripping behavior one iota.)
posted by mkultra at 4:07 PM on September 12, 2010

I am sick of hearing this. Good luck if you're in your late 50s and trying to find work at a place that knows you're so overqualified that it's a joke, or you're at least twice the age of the person doing the hiring. As far as food stamps--I'm told I'm not eligible because I get the equivalent of $180 a week for rental income on a small apartment in my house. My mortgage is $1,900 a month.

My unemployment benefits of less than a quarter of what I used to make ran out last week.

Please, everyone, spare me the moralizing about what you will do when you're desperate. When the top one percent of our society stops collecting 25 percent of the country's wealth, I'll worry about whether taking the appliances is a bad thing to do.

I think you are confusing desperation for pride. Did you even try to get any of these jobs you are laughably over qualified for? Or are they beneath you? I don't know about you, but I'd rather be seen as the guy who would take any job he could to support himself before I'd ever want to be seen skulking into the flea market with my air conditioner.

And you are mistaking income with wealth. Yes, the top earners in an economy make a lot of money. That is irrelevant. They aren't taking money from anyone except their customers/shareholders.

Dude, I know it sucks, because it has happened to almost everyone in my family as they reached that age. And you know which person got out OK? The high powered engineer who lost his highly paid gig, who knocked on every door until he got a job sweeping up in some factory.

So I'll quit moralizing when I stop hearing people whine.
posted by gjc at 4:18 PM on September 12, 2010

Mortgage brokers were walking around East Flatbush, knocking on doors, telling just about anybody: Hey, we can get you a house. If you have a house, we can get you a big home equity line of credit. This happened in poor neighborhoods all over the country. And, while the FBI and other law enforcement folks, say they don't have the exact numbers, it's clear that fraud--like the fraud on Richard's application--was ubiquitous.

Those weren't bankers.

I know there was fraud, but it wasn't as high as people would try to make us think.
posted by gjc at 4:20 PM on September 12, 2010

I kind of assume the people doing this are the greedy people who bought more house than they could afford or refinanced a home so they could buy jetskis.

Yeah, they're in it with the welfare queens and anchor babies!

Hey, you know who is the real victim in all this? Wall Street. How are they going to afford those vacation homes in Colorado, the mansion in Connecticut and the secret, illegal Cayman Islands trust account when Ma and Pa Kettle are being GREEEEEDY ASSSSHOLES and taking their FRIDGE and STOVE! Or if they neglect to maintain the foreclosed property and someone breaks in and steals stuff! I tell you, that lowers the value of the real estate and they really do lose out! For shame, boo hoo hoo.

Cry me an asshole river.
posted by peppito at 4:21 PM on September 12, 2010 [1 favorite]

How high is high enough gjc? Pick level of bank employment and we'll find you proof their were complicit. There's no innocence here and the only ignorance was on behalf of the individuals taking out mortgages.
posted by griphus at 4:24 PM on September 12, 2010

Yeah you can't pull the wires and pipes out of the house. Duh.
posted by Mister_A at 4:32 PM on September 12, 2010

My wife and I were in the market in Southern California was just starting its last climb, and we were looking in a brand new community in South Orange County, where the houses weren't even built yet.

We found a small house that I KNEW we could afford, but just barely at first, and we were flatly denied by our bank.

As it turned out, we bought a townhome just down the street that was much larger and about 100k less expensive, and also faced a large park, and if one of us lost our job now we could still make the payments.

The point is, we would have taken a chance on a risky loan, but the bank wouldn't let us, WHICH IS ITS JOB as a responsible member of the community. By no coincidence, our bank is a local credit union, and the people there go out of their way to help their members, because those are the only people who matter to them.

Just the other day I was cashing a large check (an amount that would usually be an automatic 3-day hold), and without me saying a word the teller asked if I needed the funds available immediately. I said that would be nice, and he rushed to a manager and got it approved. I didn't ask because I didn't know that was an option... but that bank's business is reliant on MY happiness, not thousands of anonymous stockholders' happiness.

There's obviously fault on both sides, but if I have to choose between my neighbor who made a poor choice and is trying to get out of it any way they can (none of my neighbors are gutting their houses) or Citibank, I'm choosing my neighbor. I KNOW that guy, I might teach his kids, and I understand his motivations. I don't understand Citibank's motivations, other than maximizing profits for a bunch of people who already have lots of money.

And everyone should use local banks. I believe that in California the credit unions are required to take your business even if you're not part of the 'group' they represent.
posted by Huck500 at 4:34 PM on September 12, 2010 [8 favorites]

Pick level of bank employment and we'll find you proof their were complicit. There's no innocence here and the only ignorance was on behalf of the individuals taking out mortgages.

Which is the law that says never attribute something to evil when stupidity will do? Look, if these guys were as universally smart 'n' evil as you suggest, they would not have been whip-lashed when the tide washed out on them. Even the supposed genius Paulson only got his billions because he was able to write one way bets with Goldman Sachs. Since then his hedge funds have been losing money.

The longer I live, the more I see people I went to college with in positions of serious responsibility, the less surprised I am at how much things get screwed up.
posted by IndigoJones at 4:38 PM on September 12, 2010

gjc - many places will not hire someone who is overqualified.
posted by jb at 4:42 PM on September 12, 2010 [3 favorites]

I didn't say they were smart. I said they were complicit. Complicit with using unethical strategies to reap profits. And, yes, they fucked up and got whiplashed and bailed out with public funding. You can't any more apply Hanlon's Razor to this situation than you can to our little boondoggle in Iraq.
posted by griphus at 4:43 PM on September 12, 2010

gjc: It's not good to be presumptuous. I'm sure that those you're addressing don't want to get into details re their personal lives. Having been on the job market in this era, you don't even want to hear what I'd say to your face re that post. You should be quiet while you're behind.
posted by raysmj at 4:58 PM on September 12, 2010 [11 favorites]

As if you could live or pay a mortgage via sweeping a floor anyway? What's that about? Illegal immigrants are hired for that kinda thing where I live anyway.
posted by raysmj at 5:01 PM on September 12, 2010

What I don't understand is why it's such a bad thing for someone to get foreclosed on in these cases. Doesn't this make them... renters? As a renter myself I don't think this is worth much anger at anyone, let alone the banks. I think the banks deserve to pay the full cost for their shabby lending practices but that doesn't mean the other side of the transaction is a victim.
posted by ygbm at 5:19 PM on September 12, 2010

The borrowers are at fault. They copuld not afford what they bought. Nah. the banks are at fault: they tried to make money for their stock holders and did that which was legal. Nah. the govt wassd at fault: they did not have regulations in place to prevent the banks from ledning money they should not have lent to people who should not have borrowed. Nah: capitalism is at fault: the system encourages the govt to not bother with regulations which prevent the banks from money they should not have lent to people who should not have borrowed. Nah: other forms of economic systems are at fault for not proving workable and thus allowing capitalism to become the system etc etc etc
posted by Postroad at 5:23 PM on September 12, 2010

I think you are confusing desperation for pride. Did you even try to get any of these jobs you are laughably over qualified for? Or are they beneath you? I don't know about you, but I'd rather be seen as the guy who would take any job he could to support himself before I'd ever want to be seen skulking into the flea market with my air conditioner.

This weak sauce. Seriously. Read the link below. Poverty-level jobs keep you, at best, right where you are and in many cases lead to your loss of government benefits. So, do you go down to McDonalds and earn a couple hundred bucks and then lose your other benefits. It is a slippery slope. Poverty is complex (as the link below will attest) and people who try to make it seem like a simple choice of working or not just don't get it. Please, get over your rugged individualism and open your mind a bit.

http://www.ssa.gov/pubs/10101.html

From the link: Resources (things you own)

Generally, your household cannot have more than $2,000 in resources. But, if your household includes a person age 60 or older or who is disabled, the limit is $3,000. Resources of people who receive Supplemental Security Income (SSI) or benefits under the Temporary Assistance for Needy Families (TANF) program are not counted for food stamp purposes. Resources include cash, bank accounts and other property.

Not all the things you own count. For example, your home and the land it is on do not count for food stamp eligibility. A car or truck counts differently depending on how it is used. Most states now use TANF rules in place of food stamp vehicle rules if the TANF rules are more beneficial to the food stamp household.

Most households also must meet an income limit. Certain things do not count as income and can be subtracted from your income. Your household may qualify for other income exclusions if it includes a person age 60 or older or disabled. The income limits vary by household size and may change each year.
posted by zerobyproxy at 5:39 PM on September 12, 2010

SeizeTheDay wrote: "I just wanted to note that while the story of welfare queens driving Cadillacs may have been overstated, there are literally reams of data showing that Americans used their houses like ATMs to extract cash for an unaffordable lifestyle. And while welfare may only be relevant to a small segment of the population, mortgage equity withdrawal was widespread across the nation and across income brackets.

To suggest otherwise (or comparing it to such a trivial matter like anchor babies) shows a gross misunderstanding of our current financial crisis. Consumers may not be "mostly" to blame (largest targets like the banks, the Fed, predatory mortgage lenders and Fannie/Freddie are still out there), but banks certainly didn't force people to lie on their applications - market forces like an extremely hot market and monster year over year returns helped that."

I suggest you consider watching this lecture by Elizabeth Warren. It paints a drastically different picture than the one you do.

On the topic, I think that regardless of what the bank may or may not have done, two wrongs don't make a right. It's one thing to take appliances like a free standing refrigerator, stove, or microwave. It's another thing entirely to remove all the wiring, cut up the walls, or tear out fixtures. The latter is probably prohibited by your mortgage.

If your bank has really treated you wrongly, get an attorney and sue the bank. There's probably someone who will take your case on contingency.

We do ourselves a grave disservice by attempting to turn our society into one befitting a poor third world country. There are already enough people working feverishly on that. Don't be one of them.
posted by wierdo at 5:54 PM on September 12, 2010 [1 favorite]

I think you are confusing desperation for pride. Did you even try to get any of these jobs you are laughably over qualified for? Or are they beneath you? I don't know about you, but I'd rather be seen as the guy who would take any job he could to support himself before I'd ever want to be seen skulking into the flea market with my air conditioner.

Yes, you're right about one thing. You don't know about me. I have been picking up scrap metal, selling books, applying at stores like kMart and Target, walking dogs, babysitting, working odd jobs and doing anything and everything I can, legally, to support myself. For 10 weeks, I worked a temp job at a fourth of my former pay and was glad to do so. For four months, I worked the Census, including a stretch of 32 days straight, but yet less than fulltime because of the peculiarities of assignments. The result of those two temporary jobs was to knock me out of extended unemployment benefits because of a "break in claims." I didn't care. I figured either might pay off in a real job, which has not materialized. I'm in line right now for two jobs that, if offered, pay at about the same rate as those two temp assignments. One has benefits that start almost immediately; the other starts in six months. I have been asked to prepare proposals and write "sample" assignments that then don't turn to real jobs but I suspect my work has been used.

You have no clue what you are talking about when you assume that my pride or that of others might get in the way. I come from a blue-collar family that has always regarded collecting unemployment as a little shameful, even though I've paid into the system since my first job at 16. I am out of work because my industry is dying and the people being hired in what passes for the next big thing are straight out of college and working for relatively nothing. Believe me, people with experience can't even get an email response. I count myself lucky to have gotten a "you're overqualified, we can't hire you" email about a month ago because it happened to be someone I know. The pride went out the door two years ago. Stop telling other people what they should be doing when you don't know what you're talking about. Your assumptions are incredibly offensive.
posted by etaoin at 5:57 PM on September 12, 2010 [32 favorites]

So lets suppose you bought all new stuff for your house. New counters, fridge, etc. Wouldn't you feel entitled to take it?

there are literally reams of data showing that Americans used their houses like ATMs to extract cash for an unaffordable lifestyle.

Where is it? I mean, this is the Internet. If you say there are reams of data for something, you should actually link to it, not just accuse people who disagree with you of "grossly misunderstanding" things. Certainly you can find individual examples, but what's the actual percentage of homes under foreclosure "used their house like an ATM"

And beyond that, I'm not sure I really understand the hate for people who did this. The banks actually encouraged it because they were re-selling mortgage derivatives and they needed these deals as the raw material to package and sell. I'm not exactly clear why this is supposed to be some kind of moral failure. Maybe it's just jealousy? I don't really get it.

Desperation or not. If you need the $100 that badly, go work at McDonald's or stand in line for food stamps.

Yes, because McDonald's is an unlimited job machine! In fact, each franchise can employ up to one million people.

--

You're putting the house in a condition where it can't easily be bought by anyone other than cash-paying investors, and that's not good for the stability of the neighborhood.

Oh no! not the stability of the neighborhood! It's amazing how much bullshit people support under the guise of 'keeping property values up'

Sure, until some home-stripper who's looking for some copper piping rips out a gas line and ignites a blaze that burns down half the block. But, y'know, fuck the banks and all that shit.

Oh god. This fucking argument. "Doing [morally wrong] thing may case [bad thing]" You hear it all the time "people shouldn't smoke weed because they might get into a car accident" is one example. It's just idiotic. Especially when the bad thing being warned about doesn't actually happen (the fire in the bay area was the result of rusty old pipes, and customers had been complaining about gas leaks for years). Can you cite a single example of a gas fire resulting from stripping a house?

I kind of assume the people doing this are the greedy people who bought more house than they could afford or refinanced a home so they could buy jetskis.

Sure, let's just assume these people are douchebags who don't actually need the money. Why not? Who needs actual evidence of anything?
posted by delmoi at 5:59 PM on September 12, 2010 [4 favorites]

The failure was that nobody saw the bubble until it was too late.

Riiiiiiiight.

The fact that you actually believe this means I'm not going to engage you in conversation. Just so you know, after managing through luck to get through the dot com bubble relatively unscathed, I started paying attention to the economy a bit more. By around 2003 it was plainly obvious to anyone paying attention that real estate was the new bubble and it was inflating fast.

I just wasn't in a financial position to get in back in 2000, so I had to sit it out.
posted by zoogleplex at 6:16 PM on September 12, 2010 [1 favorite]

zoogleplex wrote: "By around 2003 it was plainly obvious to anyone paying attention that real estate was the new bubble and it was inflating fast."

Yeah, that much was plainly obvious. I don't think the sheer number of fraudulent and ill-advised mortgages was understood as widely, though. It didn't seem like it would end quite so badly. I guess if you were aware of the magnitude of the securitization trend and had noticed that it had spread beyond the GSEs, you probably knew by 2004 or 2005 what a clusterfuck it would end up being.

I figured the damage would be mostly contained to construction and housing.
posted by wierdo at 6:31 PM on September 12, 2010

After reading the first few comments:

HowTF can this country already be swinging back towards the right already? We had zero leftward movement.
posted by DU at 6:43 PM on September 12, 2010 [3 favorites]

Oh no! not the stability of the neighborhood! It's amazing how much bullshit people support under the guise of 'keeping property values up'

With all due respect, it isn't bullshit. It's just one other piece of the puzzle that shows how this mess affects everyone, not just the people being foreclosed on. Those people in the other houses aren't abstractions of the Evil Suburbanite - they're real people who may need to move for a job and be unable to sell their own home. It's all tied together. I'm not in favor of overinflated housing prices. Hell no. But it's not bullshit to consider how fucked everything has gotten and how we're all in this together.
posted by Salieri at 6:45 PM on September 12, 2010

I think I knew it would be a real ungodly mess when people I knew, who had a household income in the $80K range, bought a house with almost no money down and a $600,000 mortgage. I think that was in 2004. There was some HELOCing going on there too. I knew that wouldn't end well, and it didn't.

Anecdotally there were stories about CA farm workers with $40K incomes being loaned that kind of money, which seem to have been at least somewhat real. It was free equity cashout money for everyone!

What surprised me was that they were still building 5000sf McMansions out in Victorville as late as 2007. And golly, guess what? Almost none of them sold! Imagine that.

I've heard since that a lot of them have been bulldozed, and there's a lot of subdivisions made only of concrete house pads. I guess the builders just had to keep building even when it was suicide to do so.
posted by zoogleplex at 6:55 PM on September 12, 2010

HowTF can this country already be swinging back towards the right already? We had zero leftward movement.

I'm not sure if you count my comment among those first few, but I'm not seeing a whole lot of right-wing ranting. I consider myself to be quite far to the left (and that's by Canadian standards, which makes me pretty much an extremist in the US), but that doesn't mean that I think two wrongs make a right.
posted by ssg at 6:59 PM on September 12, 2010

And "the bankers" did set up a situation where there was no liability for anyone to check the numbers too closely. I don't think they did it on purpose, it just worked out that way.

How convenient.

Come on. Of course they did it on purpose. They hired lobbyists who were pushing for deregulation.

But it's also the problem that a lot of people were in on the con who should have known better. The realtors, the brokers, the originators/banks and the regulators, all knew what they were doing all too well. You can't really lay the blame at the foot of the consumer when everyone who is responsible for providing the loan is obligated to act legally, such as when they were allowing people to falsify income statements. If I go to the bank tomorrow for a cash loan, they will ask me for proof of income. They will follow up and make sure I actually do have a job where I say I do - I know this, because a few years ago I did apply for and obtain a cash loan for $5000 to buy a car. This is only prudent on their part.

They weren't doing due dilligence during during the housing bubble on loans as high as $750K+, sometimes $1M or more. Why not? It would have saved them a lot of money in the long run, in fact all of us all a lot of money. Well, they wanted the commissions and fees, and they sold and securitized the fraudulently obtained loans, to the benefit of Wall St. investment firms who set up the funds. Lots of people making money from these bogus loans, all down the line. Who cares? After all, prices always go up in the housing market! Right? In the end, all the fees and commissions from these bogus products, as well as the underlying property, remain in the pockets of the people who sold them to consumers, who have nothing.
posted by krinklyfig at 7:11 PM on September 12, 2010 [2 favorites]

BTW, this is what happens during every big bubble and crash. The thing gets out of control, because the people who are responsible for the products in the bubble, and those responsible for making sure everything is done the right way are making loads of money doing it the wrong way. The system is supposed to have checks and balances built in in the form of several parties being involved in the transaction of financial instruments. But when we have a bubble, all those parties are making lots of money, and we allow that market to become deregulated under pressure from the huge money-making industry, which eventually causes its collapse.
posted by krinklyfig at 7:24 PM on September 12, 2010

ssg: I'm not sure if you count my comment among those first few, but I'm not seeing a whole lot of right-wing ranting.

Are we reading the same thread? This thing is knee deep in blame-the-victim and bootstrappy bullshit talk.
posted by Mitrovarr at 7:29 PM on September 12, 2010 [3 favorites]

etc etc etc

The people who are responsible for providing a financial product are absolutely responsible for allowing fraud. Lenders, originators, brokers, realtors, were never bent over a barrel by anyone. They provided the products that caused the problems (NINJA loans, ARMs with resets that the borrower cannot afford, etc.), not the borrowers.
posted by krinklyfig at 7:38 PM on September 12, 2010

raysmj: "Yes, anyone going on about how the banks and consumers (not that I'm saying that none share any blame, especially the McMansion-ey types who were a minority in the whole National Shame, to my understanding) share the blame equally really needs to read The Big Short by Michael Lewis."

I did read this book. Pretty good, tells an entertaining story, but it doesn't paint the entire picture. It's about how certain bankers tried to make money coming and going, raking in commissions while the market was moving, and laughing as the shorts (our heros!) discover there's no liquid market to revalue these bonds and no entity to enforce cash settlement. I'm still not sure we can mark those bonds to market without declaring banks insolvent or exhausting the US guarantee of AIG. Overall, The Big Short is not about the relationship between borrowers and banks. For that, (I feel like a shill, given how often I recommend this guy), try Robert Shiller's Subprime Solution. From a guy who did see it coming, built and published proof, and repeatedly informed the public about it.

However, the houses people are destroying? Those are owned by the bondholders. All the big guys packaged the mortgages up and left the risk with someone else. That someone else? Pensions, retirement funds, and university endowments. That's who gets hurt when houses are destroyed "because the banks deserve most of the blame." My pension suffers a bit, but I know better than to trust a state employee pension overseen by Republicans, and I'm not even sure if I'm vested yet or ever will be. Still, all my grandparents rely on part on it. Worse, funding for my job (and many others) relies.

But that at least makes sense, the subject is by no means clear and requires a lot more investment in research than can ever profit most people. Rational ignorance. What doesn't make sense, is blaming the banks for lending to poor people while claiming to educate people. The ultimate result of NINJA loans is loans to people who shouldn't have been loaned money. Exactly what harm comes to the borrower through a NINJA loan? I see suggestions of cramming families into studio apartments, but where would they be if they hadn't gotten financing?
posted by pwnguin at 7:39 PM on September 12, 2010 [1 favorite]

Between the naïve and the fuck-you-got-mine attitudes, this thread is shit.
posted by five fresh fish at 7:47 PM on September 12, 2010 [2 favorites]

I have empathy for the people who have been screwed by the bubble popping, I bet it sucks really hard for that to happen. But I have no sympathy for many of them, because at the root of it all, they were being greedier than they were smart, and that almost always leads to ruin.

It needs to be repeated that the borrowers cannot force the lenders to do anything. The lenders are providing services and products, and it is incumbent upon them to act legally and in the best interests of their customers. What was happening during the bubble was outright fraud on the part of many people in the lending chain. You can say the borrower is responsible for lying on the documents, and that's true. It's also true that the broker has a legal obligation to make sure you are not defrauding the lender by lying on your loan application and that you can pay back the loan according to the terms, and it's the obligation of regulators to ensure fraud is not occurring in the lending process. The borrower is the very last link in the chain, and by then the fraud has already been set up - all it needs is a signature.
posted by krinklyfig at 7:49 PM on September 12, 2010 [1 favorite]

I see suggestions of cramming families into studio apartments, but where would they be if they hadn't gotten financing?

It's hard to say, because, for one thing, the economy wouldn't have gone to shit.
posted by krinklyfig at 7:51 PM on September 12, 2010

krinklyfig: "It's hard to say, because, for one thing, the economy wouldn't have gone to shit."

I'm pretty sure the economy was shit in 2001, when this whole thing got started. Between the dotcom collapse, Enron failing and 9/11, it was shaping up to be a very short presidency. Cutting rates alleviated this, mainly through mortgage refinancing. The pain we suffer was mere delayed, and (probably not preventable?)
posted by pwnguin at 7:56 PM on September 12, 2010

I'm taking another nap, because that's the second comment I've made that fails at grammar after revising it.
posted by pwnguin at 7:59 PM on September 12, 2010

And please explain on what planet a NINJA loan is a good idea. Why is the borrower responsible for the aggregate damage from that? Let's see ... 20 years ago, you couldn't get a NINJA loan for a house, much less a no-doc jumbo loan. Today you can't either. Why not? If it's the borrowers' fault, shouldn't they be able to force the banks to offer loans like these anytime they want?
posted by krinklyfig at 8:03 PM on September 12, 2010

I'm pretty sure the economy was shit in 2001, when this whole thing got started.

So, you're saying it's a good thing these people got loans with terrible terms for houses they no longer live in, so they're back where they started (likely with bad credit to haunt them for years), except now the economy is much worse than it was when they started. Is that right?
posted by krinklyfig at 8:04 PM on September 12, 2010

Are we reading the same thread? This thing is knee deep in blame-the-victim and bootstrappy bullshit talk.

In order to say that someone is blaming the victim, we need to agree that there is a clear victim. This is not a simple situation with clear victims in all cases. Some of these people are obviously victims of fraud and just didn't know better through no fault of their own. Others knowingly took big risks that didn't work out for them. Some people are now in very bad situations, other are not significantly worse off than they were before buying a house. To lump all these people together as victims is an oversimplification. Do you want to make the claim that everyone whose house is foreclosed on is a victim? Do you want to argue that this justifies stripping a house?

I don't like bootstrap bullshit either, but I don't see much of it in this thread.
posted by ssg at 8:38 PM on September 12, 2010

we're most likely going into foreclosure, all i want is the dishwasher i paid for.
posted by andywolf at 8:49 PM on September 12, 2010

krinklyfig: "So, you're saying it's a good thing these people got loans with terrible terms for houses they no longer live in"

Lets be clear. The terms for some, maybe even most, were good. I've seen one at WSJ minus a quarter percent, and more at reasonable but adjustable terms. I'm not sure adjustable rates are such a bad idea, though there's lots of reasons for consumers to prefer fixed rate.

krinklyfig: "And please explain on what planet a NINJA loan is a good idea. Why is the borrower responsible for the aggregate damage from that? "

A Ninja loan is great if you need credit and can't get any, perhaps because you're between jobs or a student, or otherwise an insane credit risk. If you're offered one at a good rate, it's rational to take it. If you can pay it off, great! If you end up defaulting, well, in non-recourse states that risk is on the bank. Back to renting for you. If you, the borrower, lie on the application, well, that's the tradeoff the bank is making, and why no rational broker should offer them, and no rational financier should buy them, and why they no longer are offered. If you were a bad credit risk before, you remain a bad credit risk after defaulting on a ninja loan.

I'm not blaming borrowers for taking Ninja loans. (I don't think you are either, so I'm not sure why this is an argument.) If I'm blaming anyone, it's Bush and Greenspan. 2002 would have been a lot worse, but the fed funds rate went from 6 percent to 1.25 in 2001. I'm starting to feel a bit worried about looking like a Monetarist, but when talking about mortgage loans and securitization, this stuff matters a great deal. The economic recovery from the 2001 crash was real estate, and at least partially manufactured by manipulation.

But none of the above excuses breaking laws we do have on the books against stripping the home. Without that loan, borrowers have zero right to the house. Stripping it is tantamount to theft, and punishes the wrong people. Hell, most aren't around anymore to kick. The fraudulent mortgage brokers? Most went bankrupt when the tide went out long ago. The investment banks? I can think of two off the top of my head that were wiped out, and the rest were merely bailed out and quietly and slowly rebuilding equity via interest on reserves. Ratings agencies, though, are pretty much spawn of devil, and I think we should consider why we allow them to replace oversight of pension fund managers. But they only make money for opinions, so destroying the house doesn't help them out either.
posted by pwnguin at 8:57 PM on September 12, 2010

After all, once a home owner flees into the night because the bank says they're going to foreclose, who do you go after for those taxes and fees and fines? The bank says nope, not us - we haven't foreclosed yet. The home owner has gone on to other things.

Then the county forecloses and auctions it with starting bids at the amount of delinquent taxes. The sheriff's deed at auction cuts off all prior interest in the property except vested easements, including security interests (i.e., mortgages) (IANYL - check your jurisdiction first). This is not a hard problem.
posted by thesmophoron at 9:27 PM on September 12, 2010

ssg: In order to say that someone is blaming the victim, we need to agree that there is a clear victim. This is not a simple situation with clear victims in all cases. Some of these people are obviously victims of fraud and just didn't know better through no fault of their own. Others knowingly took big risks that didn't work out for them. Some people are now in very bad situations, other are not significantly worse off than they were before buying a house. To lump all these people together as victims is an oversimplification. Do you want to make the claim that everyone whose house is foreclosed on is a victim? Do you want to argue that this justifies stripping a house?

Well, not 'everyone', but most of them. There's a few house-flipper types and a few livin'-large idiots who got screwed, but they don't make up the majority, and most of them probably aren't desperate enough to strip houses. Most people who got foreclosed on were almost certainly people who lost their jobs, and a good chunk of the rest were people who got tricked into abusive mortgages. They just outnumber the house-flippers and the gamblers too much for it not to be.

It reminds me a lot of how the anti-bankruptcy people spin the majority as idiots buying toys they can't afford, and then you find out later that the #1 cause of personal bankruptcies is medical expenses.

Anyways, I guess the reason I consider this to be 'blaming the victim' is that we're not worrying about the large, powerful, well-researched players who broke the system, we're worrying about the tiny ones who got screwed by it and are reacting. Is it right to strip houses? Is it wrong? Who cares, let's deal with the banking industry that broke the market so badly that we're in a situation where we have to care.
posted by Mitrovarr at 9:49 PM on September 12, 2010

As I understand it, the real problem to the economy as a whole was that (a) lenders/originators were allowed to sell these loans up the stream to whomever wanted to buy them, thus leading to (b) giant financial firms buying all these extremely risky loans and packaging them into credit default swaps and other financial instruments that were officially rated and sold as AAA+ investments.

As I understand it, this is way more dangerous than all the dot-com stock market betting, because even the most glowingly-rated dot-coms could be seen, in terms of market fundamentals, to be very, very risky. In contrast, a lot of money got dumped into investing in stuff that was put forth as a safe investment, which was really almost certain to fail spectacularly, and did so.

A lot of banks that should have known better got caught with their pants down - including the one that had my money, Washington Mutual, which got swallowed by Chase at pennies on the dollar.

I don't know exactly when the rules got changed so that lenders/originators were able to sell off their loans and walk away with hard cash, but that's where the problem really started. Lenders that are forced to hold the note are WAY more responsible and diligent about making sure the risk is good. I suspect that rule change happened somewhere about the time the dot-com debacle was really becoming obvious. I seem to remember it happened not too long after 9/11/2001, as a measure to stimulate the economy.

It went too far, and everyone who participated in it owns some of the blame.

It's true that the public money bailouts averted what would certainly have been a rapid and tremendous economic crash. It was, in fact, the right thing to do in order to let the whole thing deflate more slowly. Many are saying it didn't go far enough, and that's why we're still hurting, which may be true. In any event, many if not most of the people who got caught up in the hysteria and took on ridiculous amounts of debt assuming the bonanza would continue forever have gotten shafted, and they're angry about it.

This does not excuse stripping or trashing a house after you're foreclosed on, however. Leave it as is, walk away, and find more constructive uses for your anger.

Mind you, those of us who sat on the sidelines and watched the whole thing implode are also getting screwed pretty hard because of the foolishness; I got laid off in 2008 because my employer could no longer get financing to keep the company running after one of our clients went under without warning. I've been self-employed since then and getting by okay, but I have a pretty low-cost lifestyle. I can't imagine what it would be like if I was one of those people who needed a fancy car, a house full of crap and lots of power toys to feel like I was "making it in the world." Ugh.
posted by zoogleplex at 10:09 PM on September 12, 2010

I don't like bootstrap bullshit either, but I don't see much of it in this thread.

The topic wasn't very clear to begin with. It seems house-stripping is somewhat illegal in Arizona, Maricopa County to be exact, home to America's Worst Sheriff Joe Arpaio, but the convictions listed were for people breaking into (burglarizing) houses and making a business from stripping houses, not owners. And it's actually completely legal in other (most?) states.

Then this comment:

Pre-foreclosure stripping: Taking your sense of entitlement to its bitter and predictable end.

He starts by generalizing ALL pre-foreclosure house stripping as coming from a sense of "entitilement" rather than it's more likely source - desperation - and gives no evidence for his generalization. He just knows and doesn't make a distinction between the people being prosecuted in the articles, and everyday owners who lived in their house and lost it, and so sold the internal parts out of desperation. Okay, so he glossed over several important facts in the first sentence, it must get better...

There are lots of people losing their homes for really sad, awful reasons. Maybe they got sick or injured, or were unexpectedly laid off and didn't have anything in the way of savings. There are also a lot of people who bought giant plywood McMansions with nothing down and then couldn't make the $5,000 note—probably knowing well ahead of time they couldn't pay it.

Banks, predatory lending, Wall Street shenanigans, lobbyist induced deregulation, credit default swaps, garbage CDOs, chopped and sold mortgages, and inevitable recession that followed this chicanery? He recalls none of this?!?! Oh man, convenient.

You see, it's just those two types of people that exist in this world, according to him - the world is divided into two types of people - the GOOD people, who don't strip their houses (and let the banks cash out big time) and the BAD people, who steal from banks who lent them the money to buy a worthless house in the first place all the while knowing they were going to take some idiots for a ride.

People in the first group don't have time for this petty bullshit; they have to find someplace to live and a way to make ends meet. People in the second group have all the time in the world to orchestrate this kind of nonsense, and have their brother-in-law wheel around his Escalade so they can stuff the whirlpool into it. After all, those "fucking banks" who manipulated them—gun to head—into signing the loan "deserve" it.

Nice fantasy, but people in the first group ARE stripping their houses because they need the god damned money. Those "fucking banks" knew what they were doing, the people who took the loans - not the speculators who bought up investment property mind you, but the people who lived in their god damn house - saw the low monthly payment and were lied to by the banks (e.g."you can always refinance"), which should've been illegal to begin with but wasn't.

I'm so liberal I have to look to my right to see Lenin, but this is just asinine behavior regardless of your party affiliation or how bloody your heart is; no one owes you a house.

No liberal I know would ever say such a stupid, convoluted thing and think they could get away with it. I seriously doubt your liberal credentials. This entire thread should be trashed, it's utter garbage.
posted by peppito at 10:40 PM on September 12, 2010 [2 favorites]

which should've been illegal to begin with but wasn't.

Actually no, it may have been illegal, since it was done on such a large scale. It might qualify as fraud, someone ought to prosecute the banks for it.
posted by peppito at 10:44 PM on September 12, 2010

pwnguin: Sorta related question: Why do people presume an author means the main characters in a book are meant to be "heroes?" If anything, the shorts in "The Big Short" are meant to be, well, just interesting characters (multiple protagonists) who help move a good story along, who allow you to see how the larger story evolves. Whether you make them out to be heroes or anti-heroes is up to you. (I side more toward anti-heroes. One is painted so clearly as an a-hole you'd have to be insane to say that Lewis meant him to be anything but that, another is betting against his own doomsday bet until his underlings catch what he's up to and change the bet.) I've seen this in several reviews, including one who suggested the book you mentioned, and I don't get where those writing them are coming from, unless it's something they don't like about how Lewis writes more generally.
posted by raysmj at 10:45 PM on September 12, 2010

Anyways, I guess the reason I consider this to be 'blaming the victim' is that we're not worrying about the large, powerful, well-researched players who broke the system, we're worrying about the tiny ones who got screwed by it and are reacting.

Well, the post is about stripping houses, so it seems weird to judge people for talking about stripping houses. I don't think that insufficiently damning banks, mortgage brokers, etc. is a reasonable sin of omission in this case.

There's a few house-flipper types and a few livin'-large idiots who got screwed, but they don't make up the majority, and most of them probably aren't desperate enough to strip houses.

Obviously, this is just one example, but the very first link mentions a $2M dollar home that was stripped.

I don't think that the problem is really a few (or even a whole lot of) bad actors. This sort of problem is systematic. Obviously, regulatory change is desperately needed, but the problem is also one of commonly held expectations and attitudes. On that point, I don't think it is unreasonable to think that stripping a foreclosed house and pushing unsuitable risky mortgages are two sides of the same selfish attitude, though of course the actions are very different in scale.
posted by ssg at 11:08 PM on September 12, 2010

zoogleplex: "I don't know exactly when the rules got changed so that lenders/originators were able to sell off their loans and walk away with hard cash, but that's where the problem really started. "

1938:
"The Federal National Mortgage Association, colloquially known as Fannie Mae, was established in 1938 after the Great Depression to create a liquid secondary mortgage market and thereby free the loan originators to originate more loans, primarily by buying Federal Housing Administration (FHA) insured mortgages.[5]"

Securitization doesn't have to be bad, and for a long long time, it was okay. It just requires a lot of due dilligence, documentation, and a big down payment. The question is why those standards changed, and the answer is complicated.

zoogleplex: "I suspect that rule change happened somewhere about the time the dot-com debacle was really becoming obvious. I seem to remember it happened not too long after 9/11/2001, as a measure to stimulate the economy."

Glass-Steagall was repealed in 99, which made it much easier, and as I mentioned earlier, rates were cut very low in 2001. What this meant is that Citibank and others were able to enter the market. I'm not sure that we'd be in a materially better place if it had remained in place, or if money would just flow to subprime some other, more circuitous way.

The problem is, Glass-Steagall didn't change lending standards. I don't know if we can point to any one thing that did. Arguably, it was a conflation of low interest rates, a very long upward trend in housing prices, a lot of personality-over-data driven investment bank decisions, and a systemic flaw in rating agencies exploited, perhaps on both ends of the transaction.
posted by pwnguin at 11:19 PM on September 12, 2010

raysmj: "pwnguin: Sorta related question: Why do people presume an author means the main characters in a book are meant to be "heroes?""

It reads like a tragedy. Firms die by the end of this book. We know how the story will end, so it's a question of what goes on in the heads of the actors. So it's natural to interpret the shorts as tragic heroes. They're portrayed as smarter than average, maybe a bit Aspie, and saw the crash coming. They tell truth to power. And for their troubles, their friends / investors abandon them, and the people who owe them credit default swaps stiff them and possibly manipulate the market. I can't remember where they end up, but I don't think it was private islands in the carribean.

Honestly, it's a complicated timeline. When I finished reading it I still wasn't sure what the cover was about. Even now I can't remember who the ahole you mention is, or what he did to earn that reputation. Was it the doctor turned hedge fund, or this other third investment team in the same situation? Or are you meaning the guy who hooks them up with synthetic CDO managers?
posted by pwnguin at 11:37 PM on September 12, 2010

Ah, right, thanks pwnguin. Securitization of loans that are good risks, that should work out okay. I mean, what was the average loan default rate before all this, when there were no Option ARMs? Something like 0.5-1.0%? I recall it being really low. It was always a problem, but there was enough good paper out there to cover the bad stuff (at least, after all that S&L stuff back in the 80s... which was horrible then but was a fraction of this mess).

The default rate skyrocketed back in 2008 when the subprime mortgages started resetting to their higher rates, IIRC. Suddenly people who'd been paying $800/month of Interest-Only had their payments jump to $2000, $3000, $5000 and poof, what a surprise, they couldn't afford it. Nor could they refinance, because nobody was lending and their house value was plummeting.

I suppose the super-low interest rates available now may help ameliorate the carnage that's still to come over the next couple of years - a lot more adjustable-rate mortgages adjusting starting... oh right about now actually - as people with enough income may actually be able to refinance, unlike 2 years ago.
posted by zoogleplex at 12:19 AM on September 13, 2010

peppito wrote: "Those "fucking banks" knew what they were doing, the people who took the loans"

Not really. The fucking brokers knew exactly what they were doing, but why should they give a shit when they end up getting paid more on a no-doc thanks to the higher interest rate and take none of the risk? Zero of my two mortgages (both the original loan and my refi) were funded by traditional banks*.

Thankfully, my broker is not one of the pieces of shit, or at least hasn't been while I've dealt with him, after the gigantic meltdown.

It could be said that the true morons were CDO packagers who kept some of the crap they were peddling for themselves. They knew how worthless they were, yet somehow decided that would be a good idea. Everybody else was merely acting in their own best interest given the idiotic rules that were in place at the time. (aside from the many homeowners that were sold dumb-as-bricks loans rather than good ones..their only mistake was trusting their broker)

* I suppose it depends on how you define "funded." The mortgage company the broker made the loan through has a line of credit with a traditional bank, so that they can write the big check. Inside of 30 days, the loan gets sold to someone else who probably ends up securitizing it and the LOC gets paid back down. So yeah, in many cases the banks themselves were the victims of fraud when they were sold MBS that didn't deserve a triple-A rating but had one anyway.
posted by wierdo at 6:28 AM on September 13, 2010

My Dad got into the real estate business (as a local realtor) right around the peak of the boom, and much of his work, as a new agent, has been handling abandoned and foreclosed houses. The problem, in every house he's had to handle, is very much the opposite of stripping -- people just leave, and they leave all of their stuff behind. Every house he takes on to re-sell has to be "trashed out" first. They hire someone to come in and take everything out of the house. I've seen a couple of them, and they're just full of stuff. Clothes, furniture, toys, electronics, appliances, cars, tools, everything. They look like someone just got in the car and drove off, leaving everything behind. I can't see how that would be the case, so I guess people must have taken something, but it's hard to imagine what.
posted by rusty at 6:53 AM on September 13, 2010

So lets suppose you bought all new stuff for your house. New counters, fridge, etc. Wouldn't you feel entitled to take it?

Perhaps, but that's almost certainly not the case for people being foreclosed on in the first several years of living in a new house. (And if the improvements were made with home equity money that's part of the financial house of cards that has fallen down around the borrower, I am not sure any of those improvements "belong" to them either.)

A key fact people with mortgages don't understand is that they don't actually own their home (yet), and don't own very much of it at all if they haven't been making regular payments to the mortgage lender. Look, I have very little sympathy for sleazy banks, but people who naively or ignorantly believe deals that are too good to be true are grown ups who bear some of the responsibility for the situation they find themselves in.

All that aside, if you've been foreclosed on and you remove fixtures, cabinetry, plumbing, or wiring, you're a thief, because this stuff doesn't belong to you. Appliances may seem like a gray area for some, but anyone who's been involved in real estate understands major appliances usually are considered part of the home for sales purposes. (I would think the reasonable rule of thumb would be if it was there when they moved in, it stays with the house: that means it's part of the package they borrowed to purchase, and therefore have not actually paid for.)

Also, seems like it was not so long ago that a lot of these foreclosure stories talked about how people left the foreclosed properties full of their belongings, and how it cost a lot to clean out all that stuff.
posted by aught at 6:58 AM on September 13, 2010

we're most likely going into foreclosure, all i want is the dishwasher i paid for. -- andywolf

Isn't that a line from The Jerk?

"I don't need this stuff, and I don't need you. I don't need anything except this. And that's it and that's the only thing I need, is this. I don't need this or this. Just this ashtray. And this paddle game, the ashtray and the paddle game and that's all I need. And this remote control. The ashtray, the paddle game, and the remote control, and that's all I need. And these matches. The ashtray, and these matches, and the remote control and the paddle ball. And this lamp. The ashtray, this paddle game and the remote control and the lamp and that's all I need. And that's all I need too. I don't need one other thing, not one - I need this. The paddle game, and the chair, and the remote control, and the matches, for sure. And this. And that's all I need. The ashtray, the remote control, the paddle game, this magazine and the chair."
posted by wenestvedt at 7:00 AM on September 13, 2010 [2 favorites]

aught wrote: "Appliances may seem like a gray area for some, but anyone who's been involved in real estate understands major appliances usually are considered part of the home for sales purposes."

There's actually a very bright line enshrined in law here. If it's permanently attached, it's a fixture. If it's not, it's not. Most refrigerators are not fixtures. Dishwashers usually are. A freestanding range is not. A built-in is. A countertop microwave is not. An over-the-range microwave probably is. Countertops and the like are definitely fixtures. People usually selling such non-attached items with the house does not magically turn them into fixtures.

As far as why people leave a bunch of stuff in their foreclosed-on house? It's real simple, they don't have anywhere to put it. Why the people involved don't sell/donate everything they can't take, I can't quite figure out, though.
posted by wierdo at 7:07 AM on September 13, 2010 [1 favorite]

> A key fact people with mortgages don't understand is that they don't actually own their home (yet)

In some ridiculous imaginary world, maybe this is a fact. In the real world, it is demonstrably not a fact. The person(s) or organization named on the deed owns the home, legally, ethically and for all other intents and purposes.

Buying a home with a mortgage does not mean you are renting from a bank. Lending organizations have an army of quants to determine and quantify the risks before approving a loan, and one of those risks always has been that the homeowner will strip the house, sell it out for parts, and then allow the house to go into foreclosure. If the lenders feel the risk is worth the reward, they loan you money to buy a home (which you then own) using whatever collateral they feel reasonably protects them in the event of nonpayment.

The most that can be said is that people that strip a house that will eventually go into foreclosure is that they did not put the lenders interests (or, more likely, the current CDO holder's interests) above their own. It may surprise you to learn, the lenders do not put homeowners' interests above their own either. It's a business transaction, plain and simple.
posted by McGuillicuddy at 7:45 AM on September 13, 2010

With respect to the whole fixtures issue. There are times when one spends a lot of effort and resources to find exactly the right appliance. The appliance that has all of the features that you want. I know that if spent months researching refrigerators before finally making a purchase, I would sure as heck want to take it with me. Would I inform people interested in my home that the house doesn't come with the great fridge? Of course, I would. And if a realtor indicated that this would make the house harder to sell, I might also indicate that the fridge would be replaced before I moved out. But this is something I can choose to do or not.

Frankly, I feel this way about most things in my house. If through painstaking labor or monetary outlay I've acquired something that I could not replace easily, it comes with me when I move.

The things in my home belong to me not the building.
posted by oddman at 8:29 AM on September 13, 2010

A lot of the cookie cutter housing that went up in the last decade or so came with predesigned kitchens that looked like an HGTV commercial. Hell, here in Brooklyn, stuff like "Kohler fixtures! Italian marble countertops!" became highly touted selling points for condos, designed to obfuscate the crappy construction that went into them.

I'm curious from a legal perspective- if you got a mortgage on a place like this, is it legal to sell the appliances without replacing them with equivalent value? I realize it all depends on the wording of the contract, but I'm wondering what SOP is in this case.
posted by mkultra at 11:20 AM on September 13, 2010

As I understand it, this is way more dangerous than all the dot-com stock market betting, because even the most glowingly-rated dot-coms could be seen, in terms of market fundamentals, to be very, very risky. In contrast, a lot of money got dumped into investing in stuff that was put forth as a safe investment, which was really almost certain to fail spectacularly, and did so.

It amazes me that the institutions involved in buying these securitized loans took the analysts' word for it and did zero due dilligence. It wasn't easy to trace them back to actual loans, but it could be done, at least to some extent, and anyone could see that a lot of subprime paper was going to reset between 2005 and now, along with owners who could not pay the new rates.
posted by krinklyfig at 11:37 AM on September 13, 2010

mkultra wrote: "I'm curious from a legal perspective- if you got a mortgage on a place like this, is it legal to sell the appliances without replacing them with equivalent value? I realize it all depends on the wording of the contract, but I'm wondering what SOP is in this case."

It depends on what the lender has a security interest in. Generally that's the house, appurtenances, and fixtures. It doesn't matter what the money from the mortgage was spent on. For example, if you had unmortgaged property and took out a mortgage and spent the money on hookers and blow, the bank wouldn't have any right to any remaining blow or prepaid hooker services if you defaulted.

Similarly, if you take out a mortgage on your house and spend the money on a car, they can't take the car if you default (at least not without a deficiency judgment), but they can take the house. The loan is secured by the specific property outlined in the mortgage documents.

If it's personal property, you can sell it. If it's a fixture, you have to replace it.

In no case that I can think of (which is not all, I'm sure) would it be a criminal act to sell fixtures, though. The bank would have further grounds to sue you, though. If you have a non-recourse loan you'd be an idiot to do this, as it could open you up to a deficiency judgment, at least for part of the loss in value caused by your removal and sale of fixtures in which the holder of the mortgage had a security interest.
posted by wierdo at 11:38 AM on September 13, 2010

Lets be clear. The terms for some, maybe even most, were good. I've seen one at WSJ minus a quarter percent, and more at reasonable but adjustable terms. I'm not sure adjustable rates are such a bad idea, though there's lots of reasons for consumers to prefer fixed rate.

People were getting into hybrid ARMs they could not afford when they reset, with the assurance from the realtor and broker that they could re-fi when the time came. That's really putting yourself out on a limb, from the perspective of the owner or the originator. Even in the best case, if housing prices keep going up and you re-fi, even if your payments are lower your house is worth more, so you could end up owing more money.
posted by krinklyfig at 11:41 AM on September 13, 2010

Frankly, I feel this way about most things in my house. If through painstaking labor or monetary outlay I've acquired something that I could not replace easily, it comes with me when I move.

The things in my home belong to me not the building.
posted by oddman at 8:29 AM on September 13 [+] [!]

Like the plumbing?
posted by Pantengliopoli at 12:48 PM on September 13, 2010

The things in my home belong to me not the building.

Like the plumbing?

What? Once utilities enter your property, they're essentially your responsibility (costs). But when you want to remove thosee parts within your house, it's suddenly not your property to do with as you please? Bullshit.

for my own understanding (and this is in no way meant to be accusatory): you DO believe that everyone is owed a house?

Hey, do you believe everyone is OWED food? Water? Air? Basic shelter? How DARE you give MY excess food to those poor people who can't afford shit! Do you believe people are owed basic necessities to sustain life merely because they're people? Well, yes, in fact it's international doctrine.

But wait: Do you believe the rich are OWED massive tax cuts? Or that the banks and investment firms DESERVED a taxpayer bail out? But you won't ever ask THOSE questions, will you?

Funny how people on this thread would focus on some petty crime committed by some poor guy (burglarizing an abandoned house), rather than the massive fraud and crimes committed by a few thousand insanely wealthy Wall Street interests committed against an entire country.

Go read your 1948 Declaration of International Human Rights - right to "shelter" has been in there for 60 years, most of the world knows this by now - and since we're mostly discussing poor people losing their 2-3 BR suburban homes and gutting them for the money - more than likely to buy something to eat or clothes for their kids - this would probably apply. And the Federal Housing Authority that then must step in to help these newly destitute pay rent/find affordable housing, since the banks are totally unwilling to negotiate their criminal loans, would agree with me.

Sorry, this didn't turn out to be the "rich people losing their McMansions" story you were looking for.
posted by peppito at 2:06 PM on September 13, 2010

However, the houses people are destroying? Those are owned by the bondholders. All the big guys packaged the mortgages up and left the risk with someone else. That someone else? Pensions, retirement funds, and university endowments. That's who gets hurt when houses are destroyed "because the banks deserve most of the blame."

If only this were true things would have been less awful in the downturn. It confused me for quite a while - how could these collateralized debt obligations turn completely worthless? The house might have ended up being worth 50% of what it was originally sold for but that's 50c on the dollar, not 0.

The answer is in that these CDOs either contain no equity (because they are CDOs built entirely out of other CDOs, and usually the lower tranche of those other CDOs) or the equity is reserved for folks who own the AAA pieces, not the lower value pieces. Many of the instruments owned by those pensions & endowments you mention are worthless or on their way to becoming so because the CDO contains provisions that liquidate it if a certain quantity of the held properties are foreclosed.

For them its irrelevant whether the foreclosed house can be sold for 80% or 30%, they are wiped out, period.

You can learn more about this - though somewhat obliquely - by listening to the Planet Money podcast episodes where they spend a few grand to buy a "toxic asset" which is one of these CDOs and listen to their subsequent experience where it brings in less money and eventually is in danger of being dissolved. The CDOs of CDOs is well described in Hirsch's whiteboard about it.
posted by phearlez at 2:30 PM on September 13, 2010

"designed to obfuscate the crappy construction that went into them."

This is going to be another future issue coming out of this mess - a fair percentage of the housing that was built to capitalize on the big rush was pretty much slapped together out of the cheapest crap the builders could buy. It was also mostly built very quickly by relatively unskilled labor using slapdash techniques.

These houses are going to deteriorate very rapidly compared to the more solidly built stock out there. They're not worth what anyone paid for them, and they may not be worth what you'd pay for one now, or in two years. Some of them may need massive structural renovation within a decade - which may turn them into tear-downs, cheaper to demolish and rebuild from scratch than fix up.

Google around for info about the massive problems with drywall imported from China for just one facet of this problem.

"People were getting into hybrid ARMs they could not afford when they reset, with the assurance from the realtor and broker that they could re-fi when the time came. That's really putting yourself out on a limb, from the perspective of the owner or the originator. Even in the best case, if housing prices keep going up and you re-fi, even if your payments are lower your house is worth more, so you could end up owing more money."

There were people refinancing for the full assessed (bubble-inflated) value of their house every year between 2003 and 2007. Note that the bubble value went up an average of something like 15% per year during that time.

So you get people who sold a house for $200K and then got a $300K mortgage to buy a $500K home in '03, then cashing out for 15% annually via home equity loans or LOCs and buying tons of crap (new cars, TVs, clothes, snowmobiles, whatever "lifestyle improvements" they wanted) or paying for the kids' college.

That's $75,000 the first year, $86,250 the second, $99,187 the third, and $114,065 the fourth, for a potential total of another $374,502 added to the original $300,000 mortgage. And on top of that, they might have done it all with interest-only mortgages, or even negative-amortization mortgages where they didn't even pay the whole interest amount every month.

Now, if they were able to sell their house for $1.1 million in 2007 (and some did), they probably made out okay, assuming they bought something small or went back to renting.

However, if they got stuck with the house and $700K of debt after 2007, it got ugly fast. That promise of refinancing became impossible, the "value" of the house disappeared - down by 50% in some places, average about 25% I think. That $500K house that went up to $874K went back down to $656K or maybe even as low as $440K, and now the "owners" were underwater.

This is a somewhat extreme example, but things like this did actually happen, even when there was no attempted fraud or NINJA loans - just regular people taking advantage of a magic bonanza.

The problem for the economy is, that $374,502 created by the banking system via all these loans and credits was spent on actual things - which drove the spending and put a lot of money into the economy, great - but was lent out based on a "house value" that evaporated and now will never be paid back.

The whole point of lending money is the expectation that you'll make more money back on the payments. When you make zero back, you're screwed.

It's a real mess, we're not even close to all the way out of it, and a lot of people are really, really angry about it.
posted by zoogleplex at 3:12 PM on September 13, 2010

peppito: Funny how people on this thread would focus on some petty crime committed by some poor guy (burglarizing an abandoned house), rather than the massive fraud and crimes committed by a few thousand insanely wealthy Wall Street interests committed against an entire country.

Actually, it's the articles in the OP that were referring to it. It's people like you who felt compelled to come in here to turn this discussion into GRAR GRAR FUCK THE BANKS, to which I say two things:

1) It's entirely possible to be angry at both the banks and these homeowners.

2) GYOFB.
posted by mkultra at 3:16 PM on September 13, 2010 [1 favorite]

Actually, it's the articles in the OP that were referring to it. It's people like you who felt compelled to come in here to turn this discussion into GRAR GRAR FUCK THE BANKS, to which I say two things:

1) It's entirely possible to be angry at both the banks and these homeowners.

Perhaps, but that's not what's venting around here. It's the "poor people deserve what they got for being poor" tone.

2) GYOFB.

Sorry, I can easily see this snowballing into another "social security crisis" thing - a big phoney whole lot of nothing that everyone is tricked into agreeing with because they heard it somewhere from some half-wit, conservative economist.
posted by peppito at 3:30 PM on September 13, 2010

Buying a home with a mortgage does not mean you are renting from a bank.

Of course you are. You're renting money.

Which is not meant as a wisecrack, by the way. It's something to consider seriously when confronted with the "It's always better to own than to rent" argument.
posted by IndigoJones at 4:06 PM on September 13, 2010

peppito wrote: "Perhaps, but that's not what's venting around here. It's the "poor people deserve what they got for being poor" tone."

Can you point out anyone who has complained about "poor people" in this thread? Anybody who has said anything beyond "some of these borrowers should have known better, and in any event they shouldn't be stripping the house"?
posted by wierdo at 5:29 PM on September 13, 2010 [1 favorite]

If avoiding that means bailing out the bad guys, I'm all for it.

Such a nice lesson for a conniving bunch of greedy assholes. NOT! Sure, we had to bail the banks out; I understand that, but we didn't need to reward the people who were profiteering from the abuse they let loose (and many are, still).

Where is the justice?
posted by Vibrissae at 12:54 AM on September 14, 2010

Not to be a Polyanna or anything, but loosing your home isn't entirely a bad thing. After all, you end up with much less housework!

I've never seen a thread on Metafilter so (at first) dominated by libertarian/right-wing bullshit.
posted by Goofyy at 2:53 AM on September 14, 2010

Also: No house payment. And no repairs. (that one I'm particularly sensitive to, having had to write a $700 check today to fix something that should have been fixed when the bit next to the broken bit was fixed)
posted by wierdo at 4:44 PM on September 14, 2010

There's a good side to home repairs, though. I always feel great when I fix something myself (thank you internets and DIY books) and save a ton of money.
posted by oddman at 5:50 AM on September 15, 2010

This is a somewhat extreme example, but things like this did actually happen, even when there was no attempted fraud or NINJA loans - just regular people taking advantage of a magic bonanza.

That's true, but the loans they were getting into tended to be worse as the money grew, as in, interest only, hybrids, etc. Anyway, obviously there is no such thing as a magic bonanza, or at least it can be better observed as a bubble. Responsible mortgage brokers shouldn't have been involved in doing this when things got highly overvalued, but I do know there was a point where things were tipping back in 2004-5, and re-fis were the way the brokers were making money at that point. However, taking out additional mortgages is always risky, nothing magical about it. Doing it for frivolous reasons was very popular at one point but still not very smart.
posted by krinklyfig at 3:58 PM on September 23, 2010

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