Social Question

kelly's avatar

Comments on the guy who bulldozed his $350000 home so the bank would only get the pile in foreclosure?

Asked by kelly (1902points) February 19th, 2010

Todays news story, of guy who had put up his house as collateral for a business loan of $160,000 but house is worth $350,000.

Observing members: 0 Composing members: 0

30 Answers

Likeradar's avatar

Do you have a link? Sounds like a worthwhile read…

stump's avatar

He’s a sore looser and a welcher. He bet his house on a business deal that fell through, and now he doesn’t want to pay up. The bank should sue him for the full value of the house.

Val123's avatar

Yeah. Link! Link!
Well, he’ll still owe on the house, won’t he? I mean, when something gets repossessed or foreclosed on, they try to recoup by selling, but if they can’t get all of their money, they still come after you, right? (I don’t know much about this stuff!) If you have a car and you owe $10,000 on it, and they take it away, but can only get $7000, you still owe them $3,000, right?

As far as getting out of his promises and debts, I have no respect for the guy. A real man would have sold the house, paid off the debt, and bought another smaller house.

MissAusten's avatar

It sounds childish and spiteful. He probably only made things worse for himself, too. I can’t imagine something like that being legal.

I bet it would have been fun to watch, though.

jrpowell's avatar

Does the guy own a airplane?

Dr_Dredd's avatar

@johnpowell That was my first thought, too.

Val123's avatar

Once upon a time one of our customer’s from the shop was getting her house foreclosed on, so she started parting it out! Our mechanic bought her whirlpool, jacuzzi tub and her back door. Yes. He bought her back door. Every time we go by that house I just have to laugh at where the back door was!

Pretty_Lilly's avatar

He should have gotten another loan and had the home lifted out of it’s foundation, put on a flat bed and ram the whole thing into the building the bank is located in,,,and told the bank no need to repossess my home I’m delivering it to you !

Val123's avatar

@jeffgoldblumsprivatefacilities Darn it! I hate video! It always hangs up. Is there a written version?

@Pretty_Lilly Why? The bank didn’t do anything wrong.

susanc's avatar

Hmm. I’m not so sure about this particular case (no link), but a lot of people borrowed money the banks were delighted to loan them so that they (the banks) could collect, on
average, two to three times the face value of these houses over time (because you pay mostly interest on mortgages). Thus the banks make an average of 100–200 per cent on their investment without doing anything but some paperwork. The homeowner maintains the house and pays the taxes. The bank sits.
Moreover, the bank requires the potential homeowner to pay an appraiser a fee of around $400 (where I live) to certify that the house is acutually worth what the borrower is asking the bank to underwrite. But the banks choose the appraisers. So they want the appraisers to overvalue houses in order to get borrowers to borrow as much as possible. The appraisers are happy – they get paid a flat fee – the bank is happy – the seller of the house is happy – and the buyer gets screwed.
I would say it’s entirely moral to walk away from a loan of this nature. Not everyone who bought a house in the mid-‘00’s was “betting on a business deal”. Some people were just trying to buy a place to live.
Bullshit, bullshit, bullshit.

ucme's avatar

Bob the builder.Can we fix it? Yes we can!

Val123's avatar

@susanc So, you go to someone and ask to borrow money. You promise to pay it back. Then come up with a rationalization not to? That’s irresponsible. Also, the loan wasn’t for the house. It was for a $160,000 business loan. His house was up for collateral on it.

jeffgoldblumsprivatefacilities's avatar

@Val123 Written version.

The important details to note here are:

He never missed a house payment, it was taken as collateral by the bank because of IRS liens on his business.

He had an offer to pay of the house for $170,000 ($10K more than he owed), but the bank refused, saying they could get more money out of a foreclosure.

Now, I don’t know the specifics of his IRS problems (the link states that there was some trouble with a lawsuit), but I’ve gotta say, I applaud what he did. All you hear about nowadays is how banks have failed, been bailed out, and then increased fees and interest rates to screw over customers.

The bank tried to screw him, and he screwed them back, and without flying a plane into a building and recklessly endangering the lives of others. Kudos.

CMaz's avatar

“The bank should sue him for the full value of the house.”
Yes, since the bank still owns the house till it’s mortgage is paid off.

He should have flown his house into an IRS building.

Pretty_Lilly's avatar

@ChazMaz When you can learn how to fly a house let me know and we’ll go on “America Got Talent ”

jrpowell's avatar

A house doesn’t really add a lot of value to a property. In Eugene there was a vacant lot behind our house that was the same size as ours. It was for sale at the same time as ours. Ours had a pretty nice house built on it. The vacant one was 250K and ours was 320K. The land is the expensive part.

Captain_Fantasy's avatar

Spite is a poor way to go about life.
Someone could have been killed.

Val123's avatar

The article was a little confusing. It said Hoskins said the Internal Revenue Service placed liens on his carpet store and commercial property on state Route 125 after his brother, a one-time business partner, sued him.

The bank claimed his home as collateral, Hoskins said, and went after both his residential and commercial properties.

I don’t understand how the IRS putting liens on his business and commercial properties got tied in with the bank going after his stuff, especially if he wasn’t behind on his payments….?

susanc's avatar

@Val123 – right, I hadn’t read the article. My point is only this: when the market dropped,
the banks were bailed out, and homeowners weren’t. The value of many people’s homes was cut by ⅓ but the banks continue to get paid for the full value. I rest my case.

CMaz's avatar

The banks not only get bailed out. They get to still hold on to the debt.

That is a double dip in my book.

Val123's avatar

@susanc The only issue concerning home ownership is the one where they were giving out loans at temporary interest rates that meant people could afford the payments. Then the interest rates went up, and the people couldn’t afford the payments then. However, all if it, the fact that the interest rates were only good for 5 or 10 years, was spelled out in the loan documents.

Some people acted with that knowledge in mind, and took the appropriate steps to prepare for it. A lot didn’t. A lot just said, “Whatever. We’ll worry about that when the time comes.”

You can blame the lenders, but in the end, they aren’t the ones who get bit. You have to take care of yourself.

jeffgoldblumsprivatefacilities's avatar

@Val123 I think the fact that there was an offer to buy the house for $170K trumps everything else. The bank had the opportunity to get back more money than he owed them, but refused because they were greedy.

Val123's avatar

@jeffgoldblumsprivatefacilities That’s another thing that’s confusing me…..I still don’t understand. You can just say, “Hey. We had a meeting today and we’ve decided to foreclose on your house for no reason!” That can’t just do that on a whim. Also, it’s illegal for the bank to take more than what is owed on a loan. So, what am I missing?

susanc's avatar

@Val123: not talking about that. Talking about 30-year loan on a house valued at, say,
$500K.
Two years later, house is worth $350K.
Paid $100K cash down payment, standard 20%. Still owe
$390K (having paid off only $10K in 2 years because young loans pay off mostly interest).

So: Spent $100K plus $60K in payments, still owe $390 on house worth $350.

Bank sits and receives payments. “Owner” has already spent $160K, owes $390,
add that up, hmm, (licks pencil), $550K.

Bank has (I repeat) done no work beyond levying fees on buyer. Bank can repossess house if buyer cannot or does not make payments. Bank licks chops! Bank cannot lose. Payments come rolling in OR bank gets house now worth less, but can sell it for that, thus collecting $200K less than house was worth 2 years ago, but what do they care?
They still get $510 (down payment plus many months’ worth of interest payments plus money they collect from sale of house). Meanwhile, feds give banks stimulus money. Banks enjoy it and, now that they see which way the wind is blowing, refuse to lend it out.

Discuss.

jeffgoldblumsprivatefacilities's avatar

“Hoskins said he’d gotten a $170,000 offer from someone to pay off the house, but the bank refused, saying they could get more from selling it in foreclosure.”

Apparently they did have a meeting saying exactly that, – We’ve decided to foreclose on your house for no reason! Which is why I have no sympathy for them, and am glad the guy did what he did. It serves the greedy bastards right.

Val123's avatar

@jeffgoldblumsprivatefacilities That’s illegal. I wish I knew the whole story, but there is something they aren’t telling us. But now I’m going to ask a question!

jeffgoldblumsprivatefacilities's avatar

I’m sure there are more details that would shed some light on the situation. I’d be interested to hear about how the IRS liens occurred in the first place. I wish I knew the whole story too.

Val123's avatar

@jeffgoldblumsprivatefacilities Well, it had something to do with being sued by his brother/ex-partner. If the IRS was involved it can only mean he owed some taxes on the business. But that has nothing to do with the bank and his house! I mean, I used my house as collateral to buy my business. We sold the business, I still owed on the business loan, and I’m still paying it off (less than $3000 now! Yay!) They’re not going to take my house as long as….....WAIT. He must have stopped making payments on the business loan. That would explain it. I guess. I’m getting confused between what he owes on the house, and the $160,000 business loan he took out on it…...

Val123's avatar

Oh! And also…well, he no longer has his house, but he still owes the money. So, I think that wasn’t a very smart thing to do. Unless he now plans on filing bankruptcy. But if he owes the IRS on back taxes, you can’t file on those….

Answer this question

Login

or

Join

to answer.
Your answer will be saved while you login or join.

Have a question? Ask Fluther!

What do you know more about?
or
Knowledge Networking @ Fluther