Posted on 03/07/2009 11:56:28 PM PST by Chet 99
All Things Considered, March 3, 2009 · Let's say you're one of the millions of Americans facing foreclosure. You made mistakes, borrowed more than you should have — or maybe you lost your job — and now have to walk away from your house. In some parts of the country, simply walking away isn't so simple — especially if the bank doesn't want your house.
At 8:30 nearly every Monday morning, employees from the Cuyahoga County Sheriff's Office stand in a windowless room in Cleveland's Justice Center to auction off hundreds of foreclosed houses.
Hoping to buy are a few investors, bargain hunters and the rare person trying to save his or her house. Most often, it's lawyers from local law firms representing global financial institutions who claim property here. Although these days, that's starting to change.
When there's no bid, the lender can either try to sell at another sheriff sale or do nothing. Doing nothing means the foreclosure is not complete. And Cleveland foreclosure attorney Larry Rothenberg says doing nothing is becoming more popular.
Lenders Not Bidding
"Lately, lenders are finding that the costs to purchase property at the sheriff sale and resell it, and the likelihood of finding a buyer weigh against a decision to buy the property. And so it's become more likely than before that lenders are not entering bids at sheriff sales," Rothenberg says.
That changes the foreclosure equation. Rick Sharga of RealtyTrac says employees at his online foreclosure sales company have heard of other cities where lenders are walking away from foreclosures, and he worries it could spread.
"There are some urban areas where you've had rapid price depreciation, where you also have extreme unemployment issues, and nobody's buying the properties," Sharga says. "All those conditions need to be in place before a lender is going to be motivated to do what you're seeing happen now."
And when lenders don't complete a foreclosure action at a sheriff sale, the house stays in the homeowner's name.
'It's Not My House'
Sharon Little says she was shocked to find out she was still listed as the owner of a rental property on a busy Cleveland street. She walked away from the house in 2006 when she declared bankruptcy. Since then, thieves have stripped the house of siding, copper plumbing, and even windows. She found out her name was still on the deed only when she got a summons last October to appear in housing court.
"Eventually, they're going to tear this house down," Little says. "Somebody's going to have to foot the bill, and frankly I think it should be the bank because it's their house. It's not my house really, so ..."
Begging For Foreclosure
But the city of Cleveland is writing tickets for housing code violations to whomever is listed on the deed.
Bus driver Curley Jackson has been on the phone with his loan servicers trying to persuade them to foreclose on property he can no longer afford.
"I surrendered these properties back to you all. I said, 'You keep leaving them in my name, I'm getting these tickets.' They don't care. They're not getting a ticket. They're not getting threatened with jail," Jackson says.
Cleveland Housing Court officials say they are now seeing homeowners take matters into their own hands. Little, for instance, wrote up a deed and gave her house to her lender.
"That's because it was their house from the jump, so that's what we do — give it right back to them. You can keep your house. I don't want it," Little says.
Untouchable Real Estate
Bankruptcy attorney Richard Nemeth has asked state lawmakers to propose a bill that would force lenders to completely follow through with foreclosure or forgive the homeowner's debt.
"It's a really sad set of affairs when people don't want to touch a piece of real estate with a 10-foot pole," Nemeth says.
County officials in Cleveland hope a new land bank will help solve this problem by giving lenders a place to dump unwanted property. In the meantime, the city is forced to use scarce tax dollars to maintain or demolish some of these unwanted foreclosed houses.
No copper here. Amazing.
Gee, if they had time do that to the house, it’s evident there really wasn’t any copper there or anywhere near the place.
Photographic evidence of the decline of America into a 3rd world Nation.
Yeah, but there's some good plywood there for the taking! Have you priced plywood lately?
Wait until the foreclosure sales are for bank buildings that nobody will bid on.
I wonder... if the bank won’t take your house back, what prevents you from just moving back in?
What delicious irony.
First, borrowers use “ruthless defaults” to hang the house around the bank’s neck.
And now the bank says “Not it” in response. When the property taxes are not paid, guess who gets charged? The person who has their name on the trust of deed/deed/etc. Who gets charged for property safety violations? Same deal. Who has the liability for the attractive nuisance? The person on the deed.
Sure, the bank isn’t getting paid. They can still blemish the homeowner’s credit more than enough to equal acceptance of a default.
But now, the banks have pushed all the liabilities back on those who defaulted. And on houses where the value has dropped by 30% to 50%+, hey, this is delicious irony.
That’s why folks should use PVC or PEX.
Technically, nothing. Aside from the physical state of the property.
Make that CPVC or PEX.
On the other hand, now you can move back in for free. =]
CPVC for hot water, PVC for cold.
But truth be told, here in a cold climate, PEX rules. You can have water freeze in a PEX line and it won’t burst.
PEX is easy to lay, too. Flexible. But CPVC is cheap and doesn’t require special tools.
What is this “water freeze” of which you write?
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A while back I watched a TV program about a group of people living in the Amazon Jungle/rainforest. The primary occupation of the men was to hunt animals , sometimes they were in the jungle for 3 days to 1 week hunting animals to feed the tribe, when they returned to the “village” they feasted on animal flesh and drank a fermented drink prepared by the women in their absence.
When they soil played out, or the game diminished in the area or their “houses” became infested , they burned the village and went out into the forest and built new houses.
Maybe that`s the way to go.
What I’m wondering is what about the taxes? If the property is still listed in the homeowner’s name, and the bank hasn’t foreclosed, doesn’t that mean taxes are accruing? Will the homeowner still be liable for the taxes? Eventually, seems the government would own the home because of back taxes that were not paid by bank or homeowner. If somebody gets hurt on that property and there’s no insurance, can the homeowner be sued?
Sued for what? They don’t have any money.
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