He may have been offered $170K but his mortgage is $300K. What equity?
My realtor friends tell me that when many homes that are foreclosed on, the banks find the former owners have dumped bags of concrete down the toilets and sinks and that sort of thing. This story is nothing new, just a bit over the top ;-)
I don't feel sorry for the taxpayer here, we're not really footing the bill because the banks are making out like bandits. They're not only getting their bad assets paid off by the feds, they're able to collect mortgage income on short sales and that sort of thing.
I've seen a lot of this stuff over the last couple years. Probably seen over a hundred homes pretty much destroyed to the point of being too costly to repair.
They fall into 2 general catagories.
1. Physical damage done out of frustration and revenge, usually on lower-end homes (the family's only financial asset and hope of survival). I don't condone it, but I understand it. In most cases, lives have been destroyed, marriages dissolved, kids torn away from their friends and schools.
These homes are eerie to view. You can
feel the pain and heartbreak. It's like they're haunted.
2. New homes by builders who strip anything they can use on another home, cabinets, countertops, tile or hardwood floors, plumbing fixtures, doors, windows, fences...
Banks don't care, the bailout completely subsidizes a 20% loss
as long as they have taken the property back. It is against their "interest"
to do a short-sale as there is only a $5k incentive or something like that for them.
A simple flip-flop of that formula would be the best cure for the problem, and home prices would stabilize quite quickly.
