Houses stripped and demolished before foreclosure

Foreclosures now represent nearly half of real estate transactions nationwide. According to the National Association of Realtors, distressed properties already make up 45% of transactions, and climbing. Home prices continued to decline at a record pace last month, with no sign of stabilizing. further price declines could result in even more foreclosures, as homeowners are unable to refinance out of unaffordable ARM’s, or just simply realize they are extremely out of equity, and walk away from the property.

When borrowers do leave their property, they do not always simply “walk away.” Last week, a home in Monsey NY was completely demolishdemolished just a few days before the scheduled foreclosure auction. The property owner Samuel Fisch later admitted to tearing down the structure. A neighbor who had helped out by paying the property taxes initially received a summons for not obtaining proper demolition permits, but it was later determined that he was not the owner. Abraham Miller said he never owned the house at 1 Carlton Road, and was only doing the owner a favor by paying the property taxes. “A gentleman bought this property two years ago and he couldn’t pay his taxes,” Miller said yesterday. “He asked if I’d borrow him the money to pay the taxes. That’s my whole connection to this whole thing.”

Most distressed properties do not meet this extreme fate, but more often homeowners damage or strip out properties before being forced out due to foreclosure.

In Fort Myers, about 20 people did $75,000 worth of damage to an abandoned home in foreclosure. People living in the area said they had seen numerous cars going down the dirt road to the secluded house on many occasions since the home was foreclosed upon last year. An inspection of the home’s interior showed every room had some type of destruction, from broken windows to smashed in plaster to paint which was tacky to the touch, reports say. After the party, windows remained broken, huge holes were punched in walls throughout the structure, graffiti and expletives were spray painted on the walls and ceilings and two Budweiser beer cans were hung on a living room wall. Debris was scattered outside the house, but remarkably the inside — minus all the damage — appeared to be relatively clean. Deputies estimated the multi-story structure is about 4,000 square feet.

skateSome teenagers take advantage of foreclosed properties in less destructive ways. Skateboarders from as far away as Europe are flocking to Florida and California to enjoy the multitude of empty swimming pools, which make extraordinary skating venues. “We have more pools than we know what to do with,” said a skater who goes by the name ‘Mr. Peacock’. Thousands of homes, many with pools behind them, are in foreclosure. “I can’t even keep track of them all anymore” he said. Skaters are finding a surplus of deserted pools in which to perfect their acrobatic aerials. In these boom times for skaters, Mr. Peacock travels with a gas-powered pump, five-gallon buckets, shovels and a push broom, risking trespassing charges in the pursuit of emptying forlorn pools and turning them into de facto skate parks.

More often, however, it is the property owner doing the damage. Borrowers will tear out anything not nailed down to try and sell it fchousecheap for cash. Appliances, cabinets, garage doors, even electrical fixtures are removed and sold. I have seen ads on Craigslist all over the country where the appliances for sale show a photo of built-in appliances or cabinets, with listing advises that the buyer needs to remove the items. With these instructions, and pictures of almost new appliances, it is not likely that the seller is simply “upgrading.” One Craigslist ad in California lists items such as outlets and the shower stall in addition to appliances.

This ad in the Miami Craigslist is for the AC compressor unit:

I am loosing my house to foreclosure and wanting sell the 4 year old 3 ton HVAC compressor before I do.
Compressor is like New and is pictured in this ad.
Still has freon charge so will have to be drain before moved.
I work nights and am off on Fridays and that is the best day to pick it up!

There is usually no legal action taken against the suspected strippers, who are generally assumed to be the homeowners who defaulted on their mortgages. That may change with the case of an Independence Township home, valued at about $2 million, which was stripped of a long list of items in January. “It could be a larceny charge and malicious destruction of property,” said Sgt. Matt Baldes of the Oakland County Sheriff’s Independence Township substation. “I’ve been at houses where they’ve stripped the whole kitchen out and then try to sell back the cabinets to me,” said Realtor John Graham, who lists several foreclosed homes in Oakland County. He’s also been through foreclosed homes that have price tags on things such as furnaces and plumbing. “I’ve seen it before — price tags on things, and then they let people come through and buy them,” he said.

Is it legal? “If you have a dishwasher that’s a built-in, it stays. If it’s on wheels, you can take it with you,” said Phil Seaver, owner of Seaver Title in Bloomfield Hills.  Real estate lawyer John Talpos of the Troy-based Talpos & Arnold law firm agrees with him. “You can’t take down a door on the basis (that) it’s removable and you can take it off at the hinges,” Talpos said. He added the terms of most mortgages likely prohibit any destruction of the home. “You’ve got a co-owner, so to speak, and you can’t do anything to diminish the value of the co-owner’s interest,” he said. “(The lender) probably has the right to come in your house and just look at it to make sure.”

That did not stop John Burgur’s landlady from stripping his rental property last year. She took fans off the ceiling and the knobs off the homestripdoors, carted out the refrigerator and yanked up a toilet. She even pulled the plates off electrical outlets and unscrewed the faucet handles. His coffee maker and shower rod were gone. “I’m going to strip this mother,” the 70-ish property owner raved to Burgur, as she ripped apart the 950-square-foot unit on Island Way. Welcome to a dark corner of the foreclosure business: People who lose their homes to foreclosure and in a pique of revenge strip the homes before the bank takes them back.

homepricechartWith home prices and sales continuing to plummet, this is not the last we will hear about this.

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