Foreclosures and Irresponsible Home THIEVES
 

http://finance.yahoo.com/news/Owners...73&PID=3747368


Foreclosure has allowed them to stabilize the family business. Go to Outback occasionally for a steak. Take their gas-guzzling airboat out for the weekend. Visit the Hard Rock Casino.

“Instead of the house dragging us down, it’s become a life raft,” said Mr. Pemberton, who stopped paying the mortgage on their house here last summer. “It’s really been a blessing.”



You know what? If you buy a house, and you don't pay on it, guess what that makes you? A THIEF. Yes, a THIEF. You promised to pay, and then you stopped. HOW DARE YOU???


And yeah, I know there are people who may be reading this who have either gone through a foreclosure, or know someone close to them who has. I'm not one bit sorry for my comments. Yeah, the economy sucks, but there is ALWAYS a way to work on your obligations, even if you cant quite meet them. To stop paying on your house so that you can have fun on your boat, or go to an upscale steakhouse is DISGUSTING...

A thief? Nah. You're someone the bank took a bet on. The bank lost the bet. Especially when homes are irreversibly upside down, I fully support not paying. Banks do that as a matter of course with even less recourse taken against them than regular Joes like you or I suffer.

Banks should be more careful as to how much they'll loan on a piece of property. They should be more careful about who they loan to as well. To make this as simple as you try to fails to understand the totality of the circumstances.

These people are slipping into "thief" territory, but not everyone who has gone through a foreclosure has followed it up with steak dinners/time on boats.

I have a feeling this thread may go in the same direction as the "poor people are poor because they want to be" thread :rolleyes:

Co-sign.

ETA: I was happy to see the bolded coming from you.

First off, Outback is not an upscale steakhouse.

Secondly, I read that article this morning. While it annoyed me that these people were so brazen about it, it's not a new thing. As the article points out, in Florida it can take a year and a half ON AVERAGE from the time foreclosure proceedings start until the actual notice of eviction is granted. Many people will take advantage of that time to save, knowing that they can't get the house back by making those payments. There's also a lower chance that they'll trash the house upon departure, unlike people in states with faster foreclosure clocks.

I agree with Kevin. It was a bad bet that no one in their right mind would have taken. But, these "bankers," who usually had little experience in financial services, were focused on selling the houses. After a few months, mortgages tend to be sold and repackaged--meaning the original bank has no stake in what happens to the house. 2000-2007 was the Wild West as far as financial services were concerned. I remember being a college student, being offered credit cards with $45,000 limits! It was easy for the banks to offer those amounts and not worry if I defaulted.

The reader comments on the original article are great.

I was much more offended by the article in the Times last week about the mother and daughter who were stunned to realize that they had borrowed $100,000 for the daughter to get her BA in Religion and Women's Studies from NYU. They wanted to know why someone didn't stop them from doing it. WTF?! :mad:

Cosign on the steakhouse. Outback is casual dining--and not even all that remarkable.

Restaurant critiques aside, I did forget to mention this. As was typical in the early to later part of this decade, when the banks would loan $150K on a house which sold for $120K three years earlier without verifying whether the plumbing had all been replaced with solid gold, who is really responsible for their current plight?

Hindsight being 20/20, of course, any market which continues to climb at 20%+ per year is headed for an adjustment at some point.

Outback is too expensive for the quality of food it provides though.

Student loans add up, I don't like how many I have right now myself, but I knew what I was doing. It's not like you don't get statements throughout letting you know if you have interest (or not) and that payment is not currently due.

I wouldn't make defaulting my first choice, but I'd get over my guilt about it if I truly couldn't afford it. Considering how few banks have followed through with the restructuring of mortgages, I'd rather try to save up money for deposit/rent rather then attempting to pay something I already cannot afford.

Just because it's overpriced doesn't make it upscale.

Yeah, student loans add up, but you get regular updates--either monthly or quarterly--while you're in school.

Saving for deposit/rent makes much more sense, considering that these people would probably have to make a larger than normal security deposit so soon after a foreclosure. I know my building requires a 750 credit score for renters; anything less you have to pay an additional month's security deposit.

The consequences will come back on them in some form.

So who are we to tell someone else how to spend the money that they DO have? I feel it's not really my business. Why aggravate myself over something I can do nothing about?

Furthermore.. I'm sure everyone has spent their money unwisely in their lives. I've never seen someone close go through foreclosure, but I have gone out to eat when I should've put gas in my car. So what makes you or me so much better than these people?

They aren't thieves because they are not stealing anyTHING. Bank owns the house - it was a secured loan. The bank can't sell it until they go through the process, so actually having people in the house, keeping it in decent shape, is something for which they would have to PAY house sitters. We've got abandoned foreclosures in our neighborhood - overgrown lawns, vandalism and lack of water are not helping them maintain their already reduced value, and it has a negative effect on OUR home values.

I know people who have been foreclosed on because of serious financial difficulties and I know people who have chosen to "walk away" because they didn't want to stay there anymore and foreclosure, at this point in time, doesn't have the stigma that it used to. I feel compassion for the former but I do think the latter are simply being irresponsible.

I agree with you on feeling compassion. There is a woman in my town that has 3 children and worked 2 different full time jobs. She is widowed and just couldn't pay all the bills and her home had to be foreclosed on. She still let her daughter cheerlead even though she could've used that money to pay bills. It's just a really hard situation to tell your child they have to be punished and can't do the things they love rather than cut everything out completely.

The only thing I care about in relation to this thread is Outback's Classic Blue Cheese Wedge Salad, Blue Cheese Pecan Chopped Salad, lobster tails, and that awesomely seasoned sliced bread (whatever it's called).

This.

Just prior to moving into my house, the nice woods at the end of the street (and my house WAS the last one), a contractor bought the woods and built a plan of McMansions. At least a quarter of them are for sale, and a few have been abandoned. We're fortunate that a few of the local men have been cutting the grass so they don't look too bad, but anytime somebody defaults on any loan, it makes it that much harder for the next people who come along. You don't think that the bank is going to really lose money, do you? They either jack up the interest rate, or have Uncle Sam bail them out.

As for the Outback Steakhouse, everytime I've eaten there, I swear I've been served wombat steak. It doesn't taste bad, but oh, how I've paid for it later!

Unless they're physically picking up and moving the house which they don't own, I guess I don't understand what makes them "thieves."

Outback, Schmoutback. It's about being able to get into a $400,000 home when you make $25K a year and got the place with a liar's loan or no-doc loan back in 2005-2006 and then you lost your job AT the Outback as a hostess when all the other folks who made $25K a year and went to Outback once a month lost their job at the call center and couldn't go out to eat, and the Outback shut down.

Oops. Your ASS should not have been in that house to begin with, but Barney and Chris and Barney's friggin' boyfriend at Freddie/Fannie forced America to accept their theory that all Americans should have a house. Got news, Barn. Not everyone can own a house cause they can't pay for it. They can barely pay for the '98 Trans Am they got at Drive Time.

But here they are in Happy Acres gated community, enjoying the pool and the tennis courts and oh, by the way, they don't REALLY expect you to pay HOA dues or whatever they're called, do they?

Uh, yeah, they do. Your neighbor, that sucker, pays his. And now you want him to pay more since you think you are somehow so special you don't have to pay for yours? Right. The bills for cleaning that pool and servicing that gate keep on coming whether you can pay or not.

My company manages HOA's. I've been in this field for 12 years. You would not believe what we see every day. Among others, I blame site agents who sat in the model homes and over sold these folks with 1.9 teaser rates and the idea that they could re-fi in one year to a 3.9 on a house that's appreciating overnight. What a load of garbage.
Then there's the mortgage brokers and title companies who made a killing on these "Property Virgins" who got into these houses with zero down. It's called having no skin in the game.

And yes, Florida takes an average of a year and a half. That's on average. I have some sitting in houses for three and four. When the banks get close, they file bankruptcy. The process comes to the proverbial screeching halt. They never show up for the initial hearing in 30-45 days, the judge is required to give them another chance to show up in another 30-45 days (that's as much as three months for you laymen) and so it's dismissed.

Think it's over? Nah. Since only the husband filed, who's up next to file the Bankruptcy? Why you guessed it - the wife. So now we're up to another six months of living free and easy. You look in their files and they've been gaming the system for years.

The real suckers are those of us who just sent in our mortgage payment.

Just because they've gamed the system doesn't mean that most people who default are gaming it.

Bingo.

Don't you think that the system as it stands in Florida enables people like this? I mean, between the rapid construction of poor-quality homes and the fact that bankruptcy laws in Florida are insanely lax, do you think that people who are financial trainwrecks come to Florida in order to "game the system," to file bankruptcy and still keep their homes and hide assets in their children's names?

I've been wondering this because whenever I read these articles, they usually are about people in Florida (and occasionally the IE and Vegas). Also, being an architect who grew up in Florida, I see these homes and I wouldn't pay $10 for them, let alone $400K. Most are constructed so horribly.

Another thought struck me. When you sign those mortgage papers, one of those papers has this horrendous page that tells you how much you will pay for that house (with the interest all included) over the 30 years of your mortgage. That figure is usually around 3-4 times the purchase price of the home. For someone who has been paying their mortgage regularly for 20 years and then lose their home, they've paid for that house twice already, honestly. The bank takes the whole house back and they are left with nothing at all. There's something that doesn't seem quite right about that either. However, that's the risk we all take when we get a mortgage and we know that. It's still pretty awful to experience though.

This is exactly why 30 year mortgages are lame. Get a 15 year mortgage, with a payment that is 25% or less of your take home pay, get a little less house, and pay it off a bit quicker. For a couple who buys the house Pre-kids, it'll be paid for before the kids go to college. <--My goal

Banks are in it to make money. If you dont want to give the bank all your money, pay for the house in cash. Yes, it can be done. If you make $80K a year and live on $30K, you can buy a house in cash in 3-4 years.

I learned the hard way when I bought my brand new off the lot 2003 Totota Celica, which was over priced at 23K, and I paid and paid and paid on it, and even paid it off 2 years early, and STILL paid over $37K total for the damn thing. Let me tell you, I'm driving that car until the wheels fall off...and then I'll replace the wheeels and keep driving it some more.:o

True, I know a lot of people who are honestly sacrificing to keep themselves afloat but these people who are spending spending spending instead of paying their mortgage are just being irresponsible. The fact that they are still eating out, going on the boat ( Why didn't they sell it?) and going on casino vacations just shows that they haven't learned and are STILL living beyond their means.

Say what you want about Outback, but a family of four can easily drop $100 for dinner there and if you go there on a weekly basis it adds up.

This is what my son does for a living - he was hired out of college to be a "mortgage remediation specialist" for a major bank who bought a smaller bank that had made a TON of "no documentation" loans in Florida.

What he says is that it is getting almost impossible to get the modifications okay'ed by the underwriters due in large part to the moving target that the government is giving them in terms of legislation and help. As soon as they've done the paperwork based on one thing, there's some hitch and they have to go through the process again. Couple this "banging his head against a wall" day after day, along with being in a cubicle call center calling people to try to help them stay in their house and getting treated like crap because who wants to talk to the bank, his life is pretty much sucking at this point - but at least he's got a job with benefits... (and he is appreciative of that)

But, along with the stories of people who've run into tough times and are doing what they can to make restitution or the best out of a bad situation, he also has stories of people who are completely gaming the system.

In one instance, there was a college professor in Miami who bought at the worst time and now is behind many months (by choice because he makes plenty of money), when my son called to offer remediation, he told my son to make the best offer, in other words, to take $$$ off what he owes, not extending terms or reducing interest rates, that wasn't good enough. He had the audacity to tell my son that his offer wasn't good enough and to come back in a few more months with a better deal, because he was sure the bank would. And the sickeing thing is, he's right. Banks don't want to own those houses.

Oh, and another interesting case is the guy who wanted to deduct his losses at the casinos in Mississippi as a "business expense", there are some real winners out there.

I must be a fool for actually thinking it is honorable and right to pay what I promised to pay...

In other words, it was easier and cheaper for some random Joe to buy a $400K house in South Florida than it was for me to rent an apartment in NYC? My landlord required my income to be 45 times my monthly rent, in addition to a 750 credit score. I had to provide a letter from my previous landlord, a letter from my current job, as well as two months of bank statements and three pay stubs. It's easier to get a mortgage, it seems...especially with a liar's loan or a NINJA loan. Also, I had to pay a security deposit and one month's rent--think of all the people who were able to get in a house with no down payment or closing costs!

Who is responsible for this?

Because a house is a secured loan. They can take it away from you if you don't pay. Rent however, is not. If you don't pay, that's imply income lost while you use resources and live there for free. It's more crucial to a landlore that you pay on time than it is to a bank.

I know why, but shouldn't as much documentation be required? It goes to show that if you didn't have to put any work into getting a mortgage--not saving $$, not maintaining a good credit score, not even giving any proof that you have a job--what's keeping you from walking away? In the case of these people, nothing.

Munchkin, I think you're right.

What he's seeing are people who had no business buying homes, in some cases they have no documentation of income and when he asks what they brought when they got the initial mortgage, they tell him the paperwork was filled out for them and they didn't have to provide W-2's or bank statements, it was totally based on "their word" and in many cases these people didn't have any concept of what they were getting into.

The whole thing is making my 24 year old son very jaded....

His attitude is becoming, "Welcome to adulthood, hate your job and find out most people are either idiots or a-holes."

I'm really hoping that after he has a year under his belt he can transfer to a different department or branch, it's a bummer talking to him, he seems really beaten down. That kind of banking is no fun! Maybe it was back in the hayday when money was rolling in, but now that the piper has come to be paid, the people cleaning up the mess are having a horrible time of it.

I want to know where all those brokers and mortgage loan officers are now? They should be cleaning up their own messes!!

I'm sure there are other hitches with the government but nothing stops the banks from helping people out regardless of government support. The stories I've seen pretty much involve a distinct lack of caring on the part of the banks. Obviously not your son's fault, it seems to be happening on the higher levels.

It's a bit like people who rant about people who abuse welfare, or medicaid. There are abusers of the system who break the rules, there are gamers of the system who play just within the rule, and there are far more people who are following the rules to the best of their ability.

Mr. Professor has every right to say that an offer isn't good enough. If you're being negotiated with, coming from the perspective of being utterly thankful for whatever you're offered isn't exactly a productive stance. I just don't see that as some sort of jaw dropping audacity. (And it's a jump to say that it's by choice just because he has a good income, it might have been a "choice" of what bill not to pay, not a "choice" not to pay because he doesn't feel like it.)

A mortgage is an agreement, I get the house as long as I pay you. If I stop paying, you get the house. If I had to stop paying, or had to make what for me would be a difficult choice to stop paying, I'd understand that that means eventually I get evicted. But I'm stupid to pack up and leave before I'm served with that notice. And if I qualify to file bankruptcy, I'm stupid not to do that if it's in my best financial interests. I just don't think defaulting is inherently dishonorable.

Bankers screwed up. They knew they were selling the mortgages and they were lazy/sloppy and were all about making the deal. I agree that people should have known better, but the guy in the suit telling you how wonderful it'll all be and how amazingly affordable this is for you, even on your limited income can be awfully convincing. I've read and worked with mortgages, they're really confusing to people who don't have that kind of experience and there are tricks that can be used to confuse even more, just like with sleazy car dealers who base the cost of your car on how much they think you can afford.

However, unlike the car dealers, the banks knew that by the time your ARM became unaffordable, they wouldn't own the loan anymore and it would be out of their hands. Dealerships wanted you to keep paying.

i remember watching this property virgins show or something like that....two PE teachers bought a 400k home in philly. is this feasible? my gut says not.

Maybe it's a generational thing, or maybe it's just a symptom of this economy, but I do feel it is inherently dishonorable to default on a loan. It's just something that was ingrained in me, but I understand your point. I just think I'd do absolutely everything to keep paying my mortgage even if I had to default on a car loan or much less forego restaurant visits and trips. I've always thought that your mortgage is the #1 most important thing to pay - home and hearth and all that ;)

My grandfather would roll over in his grave if he knew I had walked away from a debt or a signed contract. I still feel guilty at 46 when I do things I think he'd disapprove of, but that's my issue :)

It is definitely a decision that is made higher up (my son is at the absolute BOTTOM of the totem pole), and they may just be filling him a line of bull about regulations, but he does say that the bank does not want to foreclose and will go to great lengths to keep people from defaulting. It's much cheaper for them to take some $ off the balance or lower the interest rate than it would be to sell at foreclosed rate or even short sales.

I think for me it's a difference between walking away and not caring and having to make a principled decision to do it. I think very few people don't care and most would rather pay but have had to decide that they cannot.

I also think that it's a result of it being so increasingly common due to the housing bubble/crisis/whathaveyou.


I suspect the gap lies between the owner's perspective of "great lengths" and the bank's, fairly or not. Not that all banks are bad, but I hear one more story about how BoA forecloses on a home that isn't even theirs, and I'm starting to consider getting a mortgage just to default on it. (They've done it several times now, sometimes destroying property in the process.)

Luckily my son's not at BofA :) but, probably all big banks are the same.

He does really try to help those that want help, and he does what he can when he can, but obviously not too many decisions are left up to him.

At the same time that he deals with a ton of a-holes, he also deals with some pretty great people who've just either gotten in over their heads or hit rough times, and they work with him (and sometimes pray for him for helping them - which is good, we all need prayers :)), those people make the day not a total disaster!

Considering many people who are foreclosing out of having bought too much house or using their house as a piggy bank are in their 50s and 60s, I can't really call it generational. I won't even call it family-based: even after having been raised by the same parents who were big about paying off mortgages early and investing wisely for retirement, my sister and I have almost exactly opposite financial experiences and perspectives.

Basically, people wanted more house than they could afford and thought the party was going to last forever. That goes beyond generational or family mores.

Some people will abuse the system.

Some people will be abused by the system.

The sun rose again this morning.

And the rain is falling on the just and the unjust alike.

I thought the just got umbrellas. No? My bad.

Out here in Northern Cali, it is a hot mess too. During the time of NINJA loans, people were buying scads of houses. There was a family on my block that bought 3 houses. And this was at the peak of housing in Cali (2006). These houses were 2700-3200 sq feet at 600-800K a pop. Thought they were going to rent them out and get PAID!

You know where this is going right? :eek: Market went to hell in a handbasket. All 3 houses were foreclosed on

When we moved here in August 2006, it was at the point that people were BEGGING us to rent their houses


Yup, folks took out equity loans or got NINJA loans...ain't that a bitch?

Absolutely. The fact that the folks in the story had the nerve to go out to eat in the first place disgusts me, Outback or not. I'm sitting in a piece of crap house, scrimping and saving to pay it off as quickly as possible, so I can upgrade. I chose this house because I knew that, if my husband and I lost our jobs and had to work in very low-paying jobs, we could still make our mortgage payments.

If you have no business being in a house you really can't afford, I have no sympathy WHAT-SO-EVER when the bank takes it back. It's the people who cut back and cut back some more only to find they can't keep their homes. My heart goes out to them and anyone who makes sound financial decisions and is responsible with money, but falls on bad times.

Alex Pemberton and Susan Reboyras should be imprisoned.

I don't think they want your sympathy, they seem to be acknowledging that they'll eventually be evicted. And what exactly would you imprison them for besides living their life in a way you disapprove of?'

ETA: And you have the choice not to be a "sucker." But I suspect you find making your payments both possible and preferable to eviction.

Exactly what the thread title indicates. They are stealing. Just because they're getting away with it, doesn't mean it's not thievery.