Apparently, a lot of foreclosed tenants like to trash the house before they leave. I don't get it. It's hardly the bank's fault that you can't make your mortgage payment. I mean, I understand the rage at fate that has pushed you out of your home and left your credit record in shreds--yea, even if you had a hand in that fate yourself. But I don't get pointless destruction.
Copyright © 2009 by The Atlantic Monthly Group. All rights reserved.
I don't get your not getting it, except as an expression of disgust or something. It's very very common behaviour to threaten "pointless destruction" if you're pushed to extremes. These people make the threat, credibly, and are paid for it. The common-to-the-point-of-making-me-feel-like-an-idiot-for-saying-it example is MAD which is also "pointless destruction" in exactly the same way. I assume I'm not saying anything you don't know, but a good read on the topic: http://www.robert-h-frank.com/PDFs/MoralSentiments.pdf
A good read is also a good fit, so there's a good chance you've read it already. Cheers.
Perhaps if people were held criminally liable, this type of behavior would be curtailed.
Most people are quite reluctant to admit personal fault in these matters. It's so much easier to blame an external entity and then unleash rage as deemed appropriate.
If they wreck the home, that'll teach all the evil external entities that made it happen (big business, big government, greedy CEOs, international trade).
Remember, we're all victims.
Solarlux, I think you're onto something. A nation of victims means no one is responsible--except for the "evil" bank. Add victimization with a hearty dollop of embarrassment and we end up with this "real estate rage."
These people have exactly nothing to lose. They already can't make their house payment and will shortly have that dead skunk smeared across their credit record; what is the bank going to do if the house is less than perfect when the keys are finally recovered?
A lot of SWAT cops like to shoot the dog when conducting a raid, even if the dog doesn't attack anyone and there aren't drugs in the house.
Some people have anger issues. And some people find breaking things satisfying.
You probably also don't get buying houses you can't afford. People who do this are not overly endowed in the "dispassionate decision-mkaing" department.
solarlux:
That would not work for the reason that they still own the home while they're destroying it. The bank is about to take it from them, but they do own it until the bank or sheriff comes.
You can't hold people criminally liable for destroying their own property. If you could, I would be liable for destroying my logs when I light a fire in my fireplace.
One should only brutalize war protesters, never real estate.
Now that's destruction with a purpose!
Anyone with experience managing rental properties would tell you this is pretty common with evictions or people whose lease was terminated. It's just kind of a general f%!k you to the big bad landlord or bank who give them the boot after not collecting rent or mortgage payments for months.
You obviously have no acquaintances who have gone through what is obliquely called "a messy divorce".
Is a pair of scissors to EVERY piece of clothing of his in the house "pointless desctruction"?
Same impulse.
"They become destructive and resentful of discipline." - Chimpanzees Don't Make Good Pets, www.janegoodall.org
The ransom strikes me as a bit weird, essentially rewarding people for threatening to trash the house (since it doesn't look like people who leave quietly when they get the foreclosure notice get the payout). Although it would probably make good business sense to include a security deposit in new mortgage contract -- if you're foreclosed on and leave the house in good condition, or if you pay off the mortgage as agreed, you get the deposit back. If you trash the house on the way out or if they need to call the cops to haul you out of the house, then the bank keeps the deposit.
Peter,
The article explains that the people do not own the house. It has gone through a foreclosure auction and the borrower has lost all legal right to the home.
Megan,
There are plenty of plausible explanations, but the one I favor is that people do this for the same reason that they got over their head in debt with the house in the first place: they feel entitled. They grew up being told that this was the "American Dream", owning a SFR. So maybe they will tell a "white lie" here and there about their income. Surely they can make ends meet. And now, for various reasons, they can't. The American dream ending? Surely not, for they are entitled to it, because they are dreamy Americans. Smart people on Fox News and CNBC told them housing was a safe bet. Housing doesn't lose equity. Of course housing has lost equity in many places in America, just imagine if you bought a home in Cleveland in 1966! Boom, goodbye equity. Oh, but now they are mad because they were lied to! Deceived. And I guess when there is no recourse, people will act out like children. At least, that's my theory. I could be wrong.
You can't hold people criminally liable for destroying their own property
You could write a law to do so in cases of foreclosure. Existing law might not cover it, but there's no reason you couldn't make one up.
Maniakes,
Well, that only makes sense if you make a down payment. Remember that these people probably got 100% financing and rolled the closing costs into the mortgage as well. So they paid nothing, and so lose nothing. Now if you brought 80% down, it is essentially like a security deposit.
I'm reminded of the cheesy anti-drug ad where the kids dad inds his stash and asks him where he learned to do that stuff. The kid replies, "From you, I learned it from watching you!" We live in a nation where large companies trash peoples lives, have no loyalty to their employees, and wwould rather put people on the steet than work with them to help them keep thier homes. Is it any wonder when people follow their example?
Peter wrote: That would not work for the reason that they still own the home while they're destroying it. The bank is about to take it from them, but they do own it until the bank or sheriff comes.
Understood, I recognize that's the current legal state. I intended to suggest there should be a law against blatant vandalism of a lien holding that faces imminent recollection (since we all share the costs of these acts).
Why is this surprising when we have those who riot and trash their city when their basketball team *wins* the title. There's no rational reason for this--we just have more essentially uncivilized folk running around than many people realize.
Random: Most of these people don't threaten the banks with property destruction. They just do it to vent their rage. That's completely different from MAD. I don't think anyone fails to understand the motivation of someone who threatens pointless destruction to extort money.
Take away the surplus emotional baggage--the lost sense of entitlement, the vengeance, the petty resentment, the pose of aggrieved victimhood--and you're left with the simplest and best of all reasons:
The sheer thrill of willful transgression.
We live in a nation where large companies trash peoples lives, have no loyalty to their employees, and wwould rather put people on the steet than work with them to help them keep thier homes.
Oddly enough, I have never looked to a corporation as a parental role model in any way, shape, or form.
But a statement like the above does reinforce some of the earlier posts about the problems with people who maintain victim and entitlement mentalities...
"That would not work for the reason that they still own the home while they're destroying it. The bank is about to take it from them, but they do own it until the bank or sheriff comes.
You can't hold people criminally liable for destroying their own property. If you could, I would be liable for destroying my logs when I light a fire in my fireplace."
I don't believe this is correct. I think there are legal restrictions on what you can do with collateral.
Hello FXKLM;
Yup, the idea, though is that our conscious reasoning replicates the historical reasoning of our genes. Thus, we have a tendency to go nuts if pushed into a corner and others knowing this stops them from pushing us into a corner (a strategy made explicit in other contexts).
"foreclosed tenants"
Tenants are evicted, homeowners are foreclosed.
Paying deadbeat tenants to leave quietly has been a common practice for many years.
I have never looked to a corporation as a parental role model in any way, shape, or form.
I wonder about the "trashing people's lives." Isn't it more like corporations fail to enable the self-trashing of people's lives by insisting on responsibility and consequences?
Hmmmm...sounds like a decent parent to me.
Anyone with experience managing rental properties would tell you this is pretty common with evictions or people whose lease was terminated. It's just kind of a general f%!k you to the big bad landlord or bank who give them the boot after not collecting rent or mortgage payments for months.
I onced helped my uncle clean up an apartment a tenant of his had recently skipped out on the rent. The place was an absolute pigsty, strewn with triscuits and porn magazines. Some people simply live in squalor. It's entirely possible that banks are foreclosing on people who happened to let their ferrets poop everywhere on a regular basis.
I think of it as:
If I can't have it, no one will have it.
or alternatively, when people are in despair they stop caring and no longer think it matters. which can be very destructive as well.
Vandalism is how the weak assert control.
I think these people are just upset. They've lost everything. They're not thinking rationally.
Yeah, it's crappy behavior. It's completely understandable, though.
These people trash their former abodes for the exact same reason most of them are in the mess they're in: poor impulse control, arising from emotional immaturity.
I'm sorry, but it's not at all understandable. It's childish and, indeed, criminal. It's not the bank's fault that they're incapable of acting as adults either in financial or, as we have found out, behavioral, matters.
The Golden Rule still pertains, even if it is now more honored in the breach than the observance.
Disgusting behavior by spiteful proles.
"... It's not the bank's fault that they're incapable of acting as adults either in financial or, as we have found out, behavioral, matters."
However it is the bank's fault that the bank loaned them money.
It's the bank's fault that the bank presumed it was dealing with adults who could make decisions for themselves, and didn't belong in an institution for the feeble-minded where decisions were made for them.
You can't have it both ways. If you make decisions for yourself, you're responsible for the outcome. If you're not responsible for the outcome, you shouldn't be making decisions for yourself.
Period.
"However it is the bank's fault that the bank loaned them money."
I'm assuming this comment is being made with tongue planted firmly in cheek.
I am truly amazed at the number of individuals who think that because banks and mortgage companies acted greedily (that's the business they're in), it gives homeowners with poor judgment the right to default on loans that many of them are capable of making (California's jingle mail) or to even trash a home that will soon not be their property.
You have all these people who wanted to play the mortgage game and then when the market turned south, they don't want to play anymore. The Cunning Realist ran an article about this about a month ago. You'd be surprised by the number of comments that sided with the former homeowners for whom paying the mortgage 'didn't make fiscal sense anymore'.
Yes, a lot of people have their mortgages foreclosed when they lose a job or suffer debilitating illness. However, if you can't figure out what you can afford, you shouldn't have been in the housing market. How many financial institutions are going to want to be in the mortgage industry when this is all over? How hard will it be then to achieve the American dream of homeownership?
Making an issue out of it doesn't do much for the mortgage company. By the time a house is foreclosed on, the ex-owner is usually bankrupt (in the got-20-bucks-in-checking sense, if not in the actual bankruptcy process). Good luck getting any money out of them.
And if you do criminal prosecutions the mortgage company is going to have to get involved; witnesses called, documents produced. You'd have to start a department just for prosecuting people. That is expensive and the only gain is a hypothetical drop in vandalism and PR problems--- "Heartless Mortgage Company Puts Victim in Jail @ 6!" Probably easier just to pay them a few hundred and move on.
This sort of thing would make me want to sub-contract the problem out to...a nonexistent organization of perfectly legitimate Sicilian-American businessmen.
"Hi. My name's Vinnie. This is Big Guido, and this is Rocky. We want to...talk to you...about the way you trashed that house you had to move out of when the bank foreclosed."
(The ensuing scene of mindless ultra-violence has been CENSORED for YOUR PROTECTION by the Internet Board of Good Taste. You are in error. No one is screaming. The Computer is Your Friend.)
I always thought 'trashing' the house came as result of removing everything of value that isn't nailed down - and some stuff that is.
Re: I am truly amazed at the number of individuals who think that because banks and mortgage companies acted greedily (that's the business they're in), it gives homeowners with poor judgment the right to default on loans that many of them are capable of making
True, banks are in the business of making money and should not be faulted for doing so honestly. However when banks behave imprudently and make loans that a nine year old could predict will end up in default, then I believe the bank does bear some responsibility as well. However that does not excuse people trashing houses, though I think this is mainly a foreclosure-and-eviction phenomenon, not a "jingle-mail" phenomenon.
Re: And if you do criminal prosecutions the mortgage company is going to have to get involved
In cases where people have abandoned pets in empty houses the mortgage company need not bring charges: the public authorities can do so since animal cruelty is against the law. These cases make my blood boil and I'd love to see the proverbial book (or better, the whole law library) thrown at such people. It's not hard to find an apartment that takes cats; some even take dogs. And at the extreme there's always the option of the Humane Society or a public animal shelter.
Re: I always thought 'trashing' the house came as result of removing everything of value that isn't nailed down
This sometimes happens when vandals invade after the eviction. Given the price of copper today, copper plumbing fetches a good return. Whole blocks of houses in places like Cleveland have been stripped to their wall studs.
As an aside, I bought a house in 1995 from people who were about to be foreclosed on. While they didn't trash the house they did take the exposed plumbing in the laundry room with them, which still mystifies me (copper was not very expensive in those days)-- did it have sentimental value, maybe they bought it on their honeymoon? They also called the electric company and put the electric bill in my name two weeks before they moved out (they had my SS# from the sale docs) and then left the AC on and the windows open when they moved.
The point of the pointless destruction is to rage against the gods. When friends, family, and neighbors see you loading up that U-Haul with all your worldly goods, everyone can clearly see that you are a fool. You bought a house you couldn't afford at the top of the market. The gods have clearly forsaken you.
Now, contrast this with a guy mentioned in a recent NYTimes article who was spending several million dollars on a new condo in Manhattan. He had "retired" at the ripe old age of 39 from Merrill Lynch where he had been an Investment Banker. He is somone clearly favored by the Gods. He had the right parents, went to the right schools, chose the right major, got the right interneship, got the right job, got assigned to the right team, that gave him access to the right deals, that enabled him to retire at 39. It is obvious that the gods of fate favor him most generously.
The accusations of victim-think and self-destructive irrationality cut both ways.
The banks were foolish and greedy, and now they're paying the price for it. If you want to deplore personal irresponsibility, then you ought to aim your tongue-clucking at the financial institutions just as much as at the home owner or renter who trashes the place before being evicted.
If you're really going to assert, as Rob Lyman does, that "corporations fail to enable the self-trashing of people's lives by insisting on responsibility and consequences," then you also have to recognize that these homeowners are failing to enable the self-trashing of the financial services industry by insisting upon responsibility and consequences for short-sighted and utterly foolish lending practices.
It is simple immaturity and lack of respect for the property of others. It is no different from puncturing someone's tires, or vandalizing a neighbor's property because of some dispute.
I am guessing these are criminal activities that banks and mortgage lenders simply don't prosecute due to cost/benefit analysis.
you also have to recognize that these homeowners are failing to enable the self-trashing of the financial services industry
Some people take my comments waaaaaay too seriously.
But we aren't talking about mere default, which introduces some discipline in to the financial industry. We're talking about a deliberate attempt to lower the value of the foreclosed property. It's as if a bank tried to get you fired from your job so they would get the chance to foreclose.
" strewn with triscuits and porn magazines"
For some reason I find this immensely amusing.
"But I don't get pointless destruction.
Wait, we're still talking about the Iraq War? I thought that was a few posts back. (And the Bush Administration didn't even have foreclosure-and-eviction issues to rage against, although I agree that entitlement and victimhood stuff does play into it).
"I'm sorry, but it's not at all understandable. It's childish and, indeed, criminal. It's not the bank's fault that they're incapable of acting as adults either in financial . . .[zzz]"
----
"3 "handy steps" for getting a questionable loan approved by JPM Chase's automatic system:
1. Lump all of an applicant's compensation as the applicant's base income, rather than breaking out commissions, bonuses and tips.
2. Do not disclose use of gifts for down payments.
3. If all else fails, simply inflate the applicant's income. "Inch it up $500 to see if you can get the findings you want. Do the same for assets." [h/t Megan]
Anyway, if some random person is unsophisticated, foolish, and/or kinda greedy, that's not my fault. If I then, even playing on their flaws, immesh them in some scam or quasi-scam that results in the loss of their savings, the destruction of their credit and all sorts of assorted suckitude, a fair portion of the responsibility there is mine.
(and this goes all the way up the ladder of responsibility.)
Have any of the people expressing incomprehension, disgust, and sneery comments about apes and proles ever been in this situation? (Oh, I forget, you're far too smart. It could never happen to you).
Which is not to say I condone it, but seriously . . .
Dan, the snarky comments about apes and proles are directed to those trashing their houses. Comparing them to apes and proles is indeed unfair - to apes and proles, that is.
Those undergoing foreclosure are either foolish or unlucky. In either case, I feel sympathy for them, on a human level, as I think most people do. But as posted above, if you make your own decisions, you've got to accept the consequences of those decisions, and conversely.
This, of course, is no different than the decisions corporations make every day when they declare bankruptcy or form a separate legal subsidiary to issue debt so that if the venture fails, the parent company isn't on the hook. For corporations, declaring bankruptcy isn't just an issue of not having enough money, but also a case of where paying back a debt doesn't make fiscal sense anymore. That is, after all, why we have limited liability companies and the sentiments expressed above are also why Britain banned them for so long.
Consequently, I have a hard time feeling sorry for anybody. The borrowers got burned, overextending themselves and believing property values only go up. Now they are stuck with houses worth substantially less than the mortgages they owe. But, on the other hand, the banks made loans secured by property that they also assumed could only increase in value, and now they are foreclosing on properties worth substantially less than what is owed them. And, of course, investment banks and hedge funds that bought retail mortgage-backed securities offering 11% returns on triple-A rated securities should have realized that nothing rated that highly should ever be giving you returns that much over core inflation.
But on the point of trashing your foreclosed place, it's a long-standing point in Common Law that you can't lawfully destroy property used to secure a debt. It's just that, as some people have pointed out, these folks are judgement-proof (i.e., without enough assets to make it worth your while to sue them). In that sense, paying them to leave peacefully seems like a very nice Coasian bargain.
" It's hardly the bank's fault that you can't make your mortgage payment. "
I just want to point out again that, as per the Garbage In, Garbage out post Megan wrote some three hours before this one, in some cases it's actually is the bank's fault, to a certain degree, that some people can't make their mortgages. Also other professionals and organizations involved in this disaster/debacle/scam.
As for the apes, etc. comments, there's probably not a lot of point in arguing with people who amuse themselves by mocking and (in that case literally) dehumanizing the less prosperous and less fortunate - and it's such a traditional pastime!
" I don't get it."
Well, we all have things we don't understand. Megan doesn't understand how people who have lost their home, along with (presumably) most or all of their savings, quite possibly in part because - whatever their faults - very clever professionals decided to get all cute - and are being kicked out into a harsh and greatly diminished future might lash out at the wood and drywall and pipes and all the represent both their lost hopes and the organizations which played some role in that. Fair enough. I don't understand how a certain blogger would have fantasized about some proxy-New Yorker bashing in the heads of imaginary violent protesters
Anyway, one of the purposes of all this is to make people think of folks who've ended up in a really crappy situation - thanks in part to the geniuses who brought you this current giant dungheap- as being rule-breakers, as being bad people. That way one can feel gleefully justified that they're getting what they deserve, that they're being punished, and of course, that this couldn't happen to you, because you're a good person. See just world theory and research on things like this (not quite what I was looking for, but in a hurry).
News bulletin for those having an especially protracted and difficult adolescence: adults make their own decisions, and accept the consequences of them.
Blaming others' for one's own decisions is infantile. There is no excuse for doing so. Adults make mistakes, but accept that the decision was theirs, and don't try to lay it off on someone else, regardless of whether it was forseeable or not.
And for you specifically, Dan, if the people you're defending had made a killing on their investments, would they have given back their windfall, or just pocketed it and cackled? They speculated, and they lost. So it goes. Man up.
The fact is, most of the people who are trashing there houses are negros and minorities. They do not understand the rules and do not fit in our society, yet want all the benefits. When do we stop kowtowing to the minorities? They whine they are persecuted, perhaps they justg make bad decisions or do not work hard enough. Not PC, but true
one of the purposes of all this is to make people think of folks who've ended up in a really crappy situation - thanks in part to the geniuses who brought you this current giant dungheap- as being rule-breakers, as being bad people.
Dan, the people who are destroying property getting foreclosed on are rule breakers and bad people.
Again, we aren't talking about mere defaulters (who may be unlucky and worth of our concern), we're talking about people who trash their homes to minimized the value the bank realizes. They do deserve to be punished.
Gary, Gary, Gary. Your attempt at trolling on this site is even more inauthentic and transparent than your comments at S,N! (if that's possible). Moran!
How many fingers did it take to count the "trashed houses" that were actually trashed? The vids I saw of purported trashing looked like paper, cardboard, packing peanuts, and other light
debris , left behind by people in a hurry . And how much was done by the homeowners , and how much was done by others? (drug dealers, homeless , partiers, and just plain vandals?) Get the answers, see if the problem actually exists, and the details, before y'all get on your high horses .
That aside , THEY LIED! The lenders, that is. They lied to a lot of people about their credit scores , and directed them to high-interest , subprime loans, saying that's all they could get. Being lied to, and ripped off, can make some people angry .Then there was a proposal in Congress, to allow federal judges to restructure some loans, to people that qualified . It wasn't a bailout, just giving people the terms they should have gotten in the first place . Nope! Bush threatened to veto it , because it threatened to reduce the windfall for the lenders .
"No one tracks how frequently such payoffs are made."
Quote from the article. No numbers, silly anecdote.
These banks sold people products that were designed to fail. In the commercial real estate realm this is known as the 'loan to own' business. This sort of highly lucrative but risky lending is perfectly legal and proper, but the lender goes into knowing the he has to keep a very close eye on the collateral. These means a lot more administrative overhead, which justifies the high fees charged up front for the loan.
These sub-prime bankers took the high fees and then failed to watch their collateral. This is business, guys, wake up! You can't make business without borrowers, so have a little respect for them and work out a graceful exit and you won't have a trashed house. And expect that you will need to watch the collateral, because organized crime knows how to figure out which houses are empty and waiting to have all the copper and appliances stripped out of them.
Instead, the banks tell people they are deadbeats, treat them like deadbeats, and act all surprised when said deadbeats extract a pound of flesh from the collateral on the way out of the door. It tells you that the national banks are not well suited for the business they have taken on, and the market will beat the hell out of them for their impudence.
Another important point here is that the banks charged the high fees, and instead of applying the fees to appropriate reserves they paid out high bonuses to executives who neglected to secure the collateral. The damage done by a few angry tenants pales in comparison to the damage done by the banks to the banks' fiduciaries.
Let us not paper over that neglect by turning this into a story about what nasty bastards the sub-prime borrowers must be. Nasty or not, those borrowers owed the banks little compared to what the banksters owed to their stockholders their counterparies, and the public at large.
I've seen renters who trashed their houses before there was any reason to kick them out - the damage they were doing was the reason for eviction. And Mike13833, it's not just litter from packing in a hurry - it's apt to be urine and feces soaked into floors and running under the walls, holes kicked in the walls, etc.
Megan, your post is intellectually disingenuous at best; blatant class warfare at worst.
The reason people are trashing their house is because they were LIED TO by mortgage brokers and lenders. House prices do not "always go up" -- they only go up at an unsustainable rate during a bubble. That bubble is popping right now despite your ignorant attempts to distract responsibility from the lending/I-banking RE industry whose bonuses depended upon throwing homes at people whose incomes had no chance of actually achieving ownership.
Don't want to take possession of a house that's been made worthless by the tenant? Don't want to have to write down the entire dollar amount of that loan? Guess what, banker... don't take part in a ponzi scheme.
Oh, one other thing. Megan -- YOU are part of the problem. Either report reality, or continue to be frivolous chaff.. your decision.
Xenos, thank you for intelligent and illuminating comments.
Give as many excuses for the sheeple as you want but it is - Plain. Simple. Wrong.
When they wreck the house, everyone pays but the idiot doing the damage - Fed bails out banks with your tax dollars, property values fall even more for your ex-neighboors, children see this as acceptable behavior, etc. etc.
The appellate court further noted that the court in Cornelison stated “that the common law
action for waste was partially codified in Civil Code section 2929, which provides that
‘no person whose interest is subject to the lien of a mortgage may do any act which will
substantially impair the mortgagee’s security.’”12
http://www.firstam.com/ekcms/upl...sures/ waste.pdf
Yes, it is illegal to destroy/damage/vandalize your property while lien is held on it.
http://www.firstam.com/ekcms/uploadedFiles/firstam_com/References/Reference_Articles/John_C_Murray_Reference/Foreclosures/waste.pdf
A pox on both their houses. So many to blame, so little time....
1. this anecdote applies to how many foreclosed homeowners?
2. The corporate financial machinery told how many lies to borrowers, investors, regulators...???
A wrong is a wrong and justice should be swift and fair and fall on everyone equally.
It will only happen in the U.S.A. under the terms of the Golden Rule. "He who owns the gold, makes the rules."
If you don’t “get” this, then my guess is that you also don’t get psychology, ethology, history, economics, political science or Janis Joplin. What a shame.
One of the most dangerous things that can be done is to put an organism, whether animal, human, state, or corporate, into a position where it has nothing to lose.
When pushed up tight against the wall, it is either uninformed or absurdly naïve to think that the organism isn’t going to resort to desperate measures. When cornered, even a mild animal will attack. With nothing to lose, gamblers, rogue traders and corporations take on rapidly increasing levels of risk. With nothing to lose, armies, from Thermopylae to the Alamo, fight to the death. Backed into a corner societies turn to charismatic demagogues like Robespierre, Hitler, Castro and Chavez to relieve their suffering or they turn to economic systems like communism. With nothing left to lose, normally well-behaved, law abiding people grab the torches and pitchforks, man the barricades, burn the cities, erect the guillotines and, yes, even feel free to punch holes in the pink walls that were recently the room of their little daughter.
The reason cash offers to leave the property in an orderly, undamaged fashion work is that they give the occupant something to lose. Without that, it’s only natural that they feel free to act out their frustration, disappointment and anger at a system that has done them, and a terrible number of normal working and middle class Americans, a great deal of harm.
As the incomparable Janis sang “Freedom’s just another word for nothing left to lose.”
CathyG,
Good Post!
Me and Bobby Magee written by Kris Kristofferson though JJ did one of the better renditions.
The people pointing to the banks as the examples of responsibility must be oblivious to the massive government bailouts currently going on.
Yes, if the peasants have no bread then why do they not simply eat cakes?
I've looked at 5 houses that were foreclosed, about to be foreclosed or auctioned, and heading that way, and the fact is these people got sucker punched by life. 2 workplace accidents which required treatment in other states, one mental illness case, and two cases of people who just couldn't keep up when their ARMs reset and suddenly nobody wanted to refinance them with a fixed rate mortgage as they'd been promised by the first lender. Greenspan on down, these people were screwing their customers and lying to them, and there is no way to afford, say, punching Greenspan in the face and there is no purpose in duking it out with your mortgage salesperson because they make the same money as you. While these people were trying to keep it together, maintenance and upkeep don't stop.
One house was like a haunted house-partly painted with a new power painter in a bucket of dried out paint. They moved to a state with better bankruptcy laws, just left with what they could fit in a truck and trailer.
Another house had been empty so long the mice had left trails of turds so deep they looked like potting soil had been spread around the walls. All the doorknobs were missing, the doors had been punched through, the drywall cut out to fix leaky pipes, and dead mice throughout the house. Bank had owned a couple of the houses and just let them sit and rot, neighborhood kids broke in and partied while the vet former owner died of Gulf War Syndrome. RV still in the driveway from when they could go fishing.
In the meantime, Countrywide, Wells Fargo, and GMAC want to sell me an ARM loan to buy a mini mansion! Really badly. I'm taking my 20 percent down and going with a local lender and a normal, used house, and I'll take my chances, but you can't possibly honestly not understand the rage of the ripped off, the violated, the abused. It explains why Bush is at 19 percent approval rating, though, because he is the symbol for crooked capitalism, the kind that runs rampant over the land, crushing the strong and weak alike.
If you want to 'punish' someone who trashes a home on the way out due to foreclosure then, assuming you're the bank, sue them for violating the terms of their mortgage agreement. Something about 'blood' and 'turnips' comes to mind here, but if you're into recreational litigation then have at it. Assuming you're not the bank, I'm not sure why you're so worked up about the idea. A bank lent a large sum of money without bothering to do any underwriting, aside from "is there someone on Wall Street stupid enough to buy this stuff", they get what they get. The rest of us don't like the externalities, but that's no reason to get so worked up over what the borrower did without also getting equally worked up over the bank's stupidity.
Sarah - The thing is, "the banks" aren't monolithic entities. Say you have a small bank with 1 mil in reserves. They'll get a line of credit from a larger lender, fund some loans, and then turn around and sell those loans to Fannie Mae, Countrywide, Freddie Mac or some other purchaser.
Punishing one part of the chain may have an effect on others. Countrywide is scrambling to clean up its deficiency loans, even for loans that it did not originate, before it's sold to Bank of America, and working to provide more serviceable terms to borrowers looking at foreclosure. It can threaten to not do business with smaller lenders if they don't comply, and because Countrywide offers better rates than Fannie Mae, it has some leverage.
I read an interesting article recently about how USAA had the highest customer satisfaction in servicing its loans, mostly because of the rare fact that it originated all the loans it serviced and owned (it was also a type of co-op). Those companies who purchase loans originated by other companies in order to service them have dramatically lower customer satisfaction ratings.
Customer Satisfaction surveys by JD Power
Megan thinks predation works out nicely for everyone in the long run. If the prey are not eaten directly by the larger predators, they will be disposed of by smaller ones and recycled into the economic ecosystem. It is just senselessly harming the system to damage property that you no longer own. How silly of the doomed prey to try to injure the victorious predator.
Protecting the weak from their own folly just makes predation inefficient. If only we could turn economically incompetent people into petroleum or some other useful good, there wouldn't be so many complaints about Capitalism.
For those struck down by life's tragedies, nothing but sympathy.
For those improvidently took out loans they could barely service in the best of circumstances, and who are not now in the best of circumstances, we need to ask ourselves, how would those people have reacted if denied their loan?
Right. They'd be furious.
The banks have blame, and frankly let them take a hit too, as well as people who accepted loans that they should have known were problematic.
Capitalism is based on the idea that each person has a right (and a natural human tendency) to try to pursue his own self-interest, as he sees it, and thereby in aggregate allocating resources most efficiently. Some people's vision isn't so good.
Socialism, which in essence is what some here are proposing a small dose of, is based on the idea that someone else knows what's best for you better than you do yourself, and therefore should make your decisions for you, poor things. And that is reprehensible, in my view.
Banks actually try to keep people in their homes in part because of the worry that the tenet will trash his house. So, I guess trashing your home is a somewhat inefficient way to transfer value from the bank to other near-foreclosed tenets. In the long run I guess this means higher interest rates for risky borrowers along with lower foreclosure rates and higher workout rates.
That said, I don't think these homeowners are that concerned with the policy implications of leaving pot belly pigs in their home (true story).
I am truly amazed at the number of individuals who think that because banks and mortgage companies acted greedily (that's the business they're in), it gives homeowners with poor judgment the right to default on loans that many of them are capable of making
I'm truly amazed at the number of individuals, like you, who seem to think that a homeowner doesn't have the right to default on a loan.
We're not talking about a moral issue that I can see. The homeowner was in a business arrangement with the bank, an arrangement to be loaned some money and pay that money back; that's an interaction governed by a lot of laws, and to the extent that defaulting isn't illegal, I don't see why someone doesn't have the right to decide that paying the loan makes less sense and costs them more than the damage to their credit rating would.
The bank would do the same thing, of course, and you'd say "oh, that's just business." Homeowners have every right to make the same business decision. Why wouldn't we expect homeowners to be greedy, too? Why is it ok for banks to be greedy but not individual people?
Megan, you might want to remember that a lot of those house trashers are heavily armed, and the trashing may not have exhausted their anger at their betters, by which I mean those who think of themselves as their betters.
read calculated risk
http://calculatedrisk.blogspot.com/2008/03/if-you-dont-get-it-it-might-be-joke.html
This sort of thing would make me want to sub-contract the problem out to...a nonexistent organization of perfectly legitimate Sicilian-American businessmen.
"Hi. My name's Vinnie. This is Big Guido, and this is Rocky. We want to...talk to you...about the way you trashed that house you had to move out of when the bank foreclosed."
(The ensuing scene of mindless ultra-violence has been CENSORED for YOUR PROTECTION by the Internet Board of Good Taste. You are in error. No one is screaming. The Computer is Your Friend.)
Posted by Technomad | March 29, 2008 1:34 AM
Ah, the Call for Death Squads. How nice. We'll soon be in Montt or Pinochet territory. But how moral and clean the High Ground will feel. No doubt McArdle will weep a crocodile tear or two when bodies start turning up in landfills. All I can say for Technomad is please, do post some contact information.
Meanwhile, another person squeaks:
Socialism, which in essence is what some here are proposing a small dose of, is based on the idea that someone else knows what's best for you better than you do yourself, and therefore should make your decisions for you, poor things. And that is reprehensible, in my view.
Posted by Occam's Beard | March 30, 2008 7:12 PM
Oh please. At best, some are encouraging a sense of society that requires generalized stakes and distributed risk not gamed by criminal scum to function. But then those of us who don't accept that Nash's paranoid schizophrenia influenced their philosophic masturbation might have a wee problem . . .
Kudos to Tanta!
http://calculatedrisk.blogspot.com/2008/03/if-you-dont-get-it-it-might-be-joke.html
Exposing more McArdle sloppy-thought.
I think trashing a home that a bank kicked you out of is in keeping with the great American tradition of fighting back against the powerful.
The United States was born of angry rebellion against the powers that be. Sure, King George III had legal rights to oppress the colonists as he did -- they were his subjects, after all. But he didn't apply his rights wisely, and suffered the consequences. And banks have the legal right to foreclose. But if they don't do it wisely, and run roughshod over people who are being figuratively kicked to the kerb, then hell yeah! let the banks cop it.
A lot of the commenters here must be upper-class toffs who never had to struggle to get by. Perhaps you don't know any working-class people. Because if you did, you wouldn't be surprised that they want to trash their houses when they're getting evicted. You'd just be surprised that more of them don't burn the entire places down.
As long as we're quoting songs, how about this one from Woodie Guthrie, in defence of Pretty Boy Floyd:
"As through this life I ramble,
I see lots of funny men,
Some will rob you with a six-gun,
and some with a fountain pen.
As through this world I ramble,
As through this world I roam,
I ain't never seen an outlaw,
Drive a family from their home."
Banks and other lenders do in fact contract out to collections agencies to try and collect debt's that they have given up trying to collect via normal means. They could very well do this with these sorts of trashed houses if it looked like it would be worth their time. They don't have Guido and Rocko but they do have people who will call at all hours of the day and night, harass you at your house, etc. in hopes of getting you to pay off at least a portion of your debt.
guineapigfury said, "...The place was an absolute pigsty, strewn with triscuits and porn magazines. Some people simply live in squalor. It's entirely possible that banks are foreclosing on people who happened to let their ferrets poop everywhere on a regular basis..."
Triscuits!! Ewww!!!
Perhaps you don't know any working-class people. Because if you did, you wouldn't be surprised that they want to trash their houses when they're getting evicted.
You must have a very low opinion of working-class people to think they all have anger-management issues and an inability to behave decently.
I do post-foreclosure evictions for banks in Oregon. The typical trust deed prohibits the borrower from commiting "waste". Trashing one's own house is "waste" and is both a default in the trust deed and subject to civil remedies for damages. Once the home has been sold at a trustee's sale [usually, but not always to the creditor], the former owner is no longer an owner and under Oregon law has 10 days from the date of sale to vacate before eviciton proceedings can be commenced. If the home is trashed after the foreclosure sale, the former owner is no longer commiting waste, but is vandalizing the property of the purchaser at the sale. This too is subject to all the normal civil and criminal remedies. In the real world, because these folks are typically judgment proof, and because the D.A. has bigger fish to fry, nothing much happens..."you ain't got nothing, you got nothing left to lose..."
Megan McArdle doesn't "get it" because she's living in an upper class ivory tower.
In fact, the foreclosed former homeowner was not a "tenant." A tenant doesn't accept financial risk on a property, and doesn't pay for the maintenance, or the taxes.
The former homeowner was a de facto "tenant" because financial trickery made it that way. A wave of propaganda in the media sucked him into a situation where he had all the risks and expenses of ownership with none of the benefits of tenancy.
These foreclosures reveal the emptiness, and indeed the fraudulence, of those arrangements. The "tenant" is stripped clean, while the financiers waddle off into the sunset.
And poor Megan McArdle doesn't "get" the vandalism. Pray tell, Miss McArdle, what do you "get"?
"foreclosed tenants"
Here's an easy way to distinguish between tenants and owners.
When you're a tenant, somebody else pays the property tax bill.
When you're the owner, you do.
Thanks -
Oh, and the reason people trash their foreclosed homes is actually not that hard to get. Two conditions need to be met.
1. You're mighty pissed.
2. You're far enough in the hole that you can't see daylight anymore, so you don't really see that it matters whether you go off the rails or not.
For lots of folks, just those two things wouldn't be quite enough, because for other reasons they're just not inclined to destroy property. They'll just let it go.
But for quite a number of other folks, some kind of 'F you' gesture is pretty satisfying.
There are, purely pragmatically, broad social benefits in not letting people get that desperate.
It's hardly the bank's fault that you can't make your mortgage payment.
From the article:
Analysts predict that as many as two million homeowners could enter foreclosure this year, caught by a slowing economy, falling house prices and, in many cases, adjustable mortgages with rates rising from high to higher.
If the bank talked the homeowner into an ARM, maybe it is the bank's fault that they can't make the payments.
Megan, you are an idiot. These people got screwed by greedy bankers. Asshole.