Squatters moving in to foreclosed homes

[editor]

The homeless are finding new homes -- illegally.

http://www.suntimes.com/news/nation/130861...using02.article

The article talks about Miami and Cleveland -- and in Atlanta people are actually paying homeless people to live in their homes to keep even less desirable people out.

Has anyone seen any evidence of this in Houston?

Any lawyers care to educate the rest of us on the status of "squatter's rights?"

[CoolBuddy06]

I never heard of anything like this. Foreclosed homes that I know of are still pristine.

[TJones]

Squatter's rights usually takes about 10 years to accomplish Ed. If you can stay on a piece of property for 10 years , how you prove that is beyond me, then apparently you have the right to stay there, at least that used to be the case. I have been reading up and I think it may actually only be 3 years in Texas now though.

[barracuda]

Makes sense to me. But wouldn't the electricity and other services be cut? I suppose it's still better than living on the street. I haven't heard of this in Houston, but then again we don't have the high foreclosure rates of some of those cities. Yet.

The most interesting solution I've seen to help homeless comes from New York, where a program exists to find legit homes for long-term homeless and assist the individual with finding a source of income, etc. I wonder if something like this could be implemented in Houston.

http://www.pbs.org/now/shows/305/index.html

What I find interesting is that they believe it costs less to house homeless individuals, since it dramatically cuts down on other costs the system must otherwise absorb, like emergency room visits.

[sevfiv]

I think in Texas it's called adverse possession.

Here's a couple pages with some information:

http://law.findlaw.com/state-laws/adverse-possession/texas/

http://www.robertslegalfirm.com/readversepossession.html

[crunchtastic]

I never heard of anything like this. Foreclosed homes that I know of are still pristine.

I've had a few news stories sent to me about the hard-hit foreclosure areas in California and Las Vegas, where entire blocks sit empty and people leaving thoroughly trash the places. One subdivision I recall in California became a significant municipal health issue because of swimming pools getting stagnant and turning into mosquito pits.

The saddest stories are of all the pets left behind in empty houses.

[RedScare]

I don't think any of these properties are in danger of being adversely possessed, since the squatter would need to pay property taxes, pay utilities and even make repairs to make his adverse possession legit. It would also have to occur over many years, and like the link TJones provided states, there is the issue of the lienholders.

[PapillionWyngs]

I was a realtor in St. Louis, and I saw this dozens of times. Another thing I witnessed was the destruction of property by those being foreclosed on. They would take the appliances, toilets, tubs, heating units, air conditioning units, wiring, some would stip the house to the studs. Some would defecate in all of the rooms, on the carpet, and smear it all over the walls - horrifying.

The worst thing I saw was a mansion, literally 20,000 square feet with pool, poolhouse and servant's quarters where the owner's (noveau riche and then lost it) spray painted grafitti on all the walls, ceilings, carpets, marble flooring, skylights, appliances, fixtures, pool, pool house, servant's quarters - the whole nine yards. The bank had to have the structures gutted and start over. The pool had to be repainted. It was sad.

These are hard times.

[PapillionWyngs]

By the way, being a Paralegal (unemployed, but nevertheless) not an attorney, I can tell you that adverse possession CAN be accomplished, if, over a number of years it is not corrected. I don't know how that would be possible in a house.

[TexasVines]

I was a realtor in St. Louis, and I saw this dozens of times. Another thing I witnessed was the destruction of property by those being foreclosed on. They would take the appliances, toilets, tubs, heating units, air conditioning units, wiring, some would stip the house to the studs. Some would defecate in all of the rooms, on the carpet, and smear it all over the walls - horrifying.

The worst thing I saw was a mansion, literally 20,000 square feet with pool, poolhouse and servant's quarters where the owner's (noveau riche and then lost it) spray painted grafitti on all the walls, ceilings, carpets, marble flooring, skylights, appliances, fixtures, pool, pool house, servant's quarters - the whole nine yards. The bank had to have the structures gutted and start over. The pool had to be repainted. It was sad.

These are hard times.

I am surprised banks don't include some type of "condition of property" clause that makes those forclosed upon responsible for willful damage caused to the property....as it is I imagine they could go after them for the damage and possibly theft of the appliances...but I am surprised it is not in writing now

[TheNiche]

By the way, being a Paralegal (unemployed, but nevertheless) not an attorney, I can tell you that adverse possession CAN be accomplished, if, over a number of years it is not corrected. I don't know how that would be possible in a house.

I know of someone who is the trustee of a will that was intended to transfer the assets to some grandchildren once they got to be of a certain age, that has been active for about 7 years and has about another 4 to go, but that didn't specify what to do with the house in the mean time. The trustee has been living there, paying the taxes, paying the utilities, and maintaining it all the while, and the family is suspicious but is so averse to cracking down on it and causing the family to divide into opposed factions that they don't want to address the matter. I think it's an attempt at adverse possession in progress.

I also know of some instances where land without clear title has been taken over by individual members of a family or by neighbors through adverse possession. I imagine that there are some cases where a house has been worth so little that it was taken along with the land. Probably mostly in the ghetto or in very rural areas.

[editor]

I am surprised banks don't include some type of "condition of property" clause that makes those forclosed upon responsible for willful damage caused to the property....as it is I imagine they could go after them for the damage and possibly theft of the appliances...but I am surprised it is not in writing now

These people just lost their homes. The last thing they care about is the appliances or the condition they left it in. They have much larger problems. Ignoring a piece of paper stating "You must keep this house nice" is very easy when you're ignoring a piece of paper stating, "You must pay the bank $500,000."

[Scott08]

These people just lost their homes. The last thing they care about is the appliances or the condition they left it in. They have much larger problems. Ignoring a piece of paper stating "You must keep this house nice" is very easy when you're ignoring a piece of paper stating, "You must pay the bank $500,000."

I was thinking the same thing. Blood out of a turnip?

[TJones]

I am surprised banks don't include some type of "condition of property" clause that makes those forclosed upon responsible for willful damage caused to the property....as it is I imagine they could go after them for the damage and possibly theft of the appliances...but I am surprised it is not in writing now

There are some banks that do have a program like that. They will offer you a certain amount of money to help with the moving expenses and such, if you will move out in a timely manner and leave the property unharmed. It is only a couple of thousand dollars I think, there is a name for this procedure, I forget what it's called though.

[TexasVines]

These people just lost their homes. The last thing they care about is the appliances or the condition they left it in. They have much larger problems. Ignoring a piece of paper stating "You must keep this house nice" is very easy when you're ignoring a piece of paper stating, "You must pay the bank $500,000."

well there are a few types of people being forclosed upon....those that never should have received a loan and those that hit hard times.....often those that hit hard times will come back and the extra burden of paying for stuff they tore up in a bit of rage might be enough to sway them to not do it.....especially in the case of someone owing a 20K sqft home at one time.....I could see them coming back.....and I can see the bank still after them for the decreased value of the home VS the loan.....and I can see a bank wishing they had a clause in there for extra money for tearing it up to start with much less the difference in property value because of a down market VS the loan amount in an up market......inserting legal speak into a contract is nothing for a bank in the way of cost

[PapillionWyngs]

Well, I am glad that some banks are doing that. I was a real estate agent in the 80's, so I am sure things have changed.

[RedScare]

well there are a few types of people being forclosed upon....those that never should have received a loan and those that hit hard times.....often those that hit hard times will come back and the extra burden of paying for stuff they tore up in a bit of rage might be enough to sway them to not do it.....especially in the case of someone owing a 20K sqft home at one time.....I could see them coming back.....and I can see the bank still after them for the decreased value of the home VS the loan.....and I can see a bank wishing they had a clause in there for extra money for tearing it up to start with much less the difference in property value because of a down market VS the loan amount in an up market......inserting legal speak into a contract is nothing for a bank in the way of cost

The banks are already collecting for the damage. The clause is the loan contract. If the homeowner trashes the house, the house will sell for less at foreclosure. The difference between the loan balance and the sale price at foreclosure is still owed by the homeowner to the bank. Trashing the house simply makes the amount owed on the difference larger.

Whether the bank can collect the money is another story, however. Many of these people have other financial problems in addition to the foreclosure. They end up in bankruptcy, or in some cases, walk away from all of their debt and start over.

Technically, damage incurred by the homeowner AFTER the foreclosure would be criminal mischief, as the homeowner no longer owns the home. However, since the banks rarely see the condition of the house prior to the homeowner moving out, it is impossible to prove whether the damage occurred before or after the foreclosure, so criminal charges would rarely be filed. I personally have never seen it happen.

Edited December 5, 2008 by RedScare

[TJones]

I remembered the program, they call it Cash for Keys.

Edited December 5, 2008 by TJones

[20thStDad]

Whether the bank can collect the money is another story, however. Many of these people have other financial problems in addition to the foreclosure. They end up in bankruptcy, or in some cases, walk away from all of their debt and start over.

Forgive my ignorance, but what do you mean by this? Like move to another city and hope no one finds out, or just leave it on the credit report and wait until it drops off? I thought bankruptcy was the only way to clear that debt out.

[RedScare]

Forgive my ignorance, but what do you mean by this? Like move to another city and hope no one finds out, or just leave it on the credit report and wait until it drops off? I thought bankruptcy was the only way to clear that debt out.

Just leave it on the credit report and wait for it to go away. Bankruptcy is for people with income. Historically, poor people simply stop paying when times get tough. When Congress succumbed to the credit card companies in 2005 and tightened the screws on bankruptcy, the bankrupt simply stopped filing bankruptcy. They did not give any more money to the banks. This should have kept these debtors out of the credit markets, but the banks did not let their mistake with the bankruptcy rules stop them. They simply lent to these poor people with crappy credit in the sub-prime market. We all know how that turned out.

In the case of home mortgages, many homeowners simply mail the keys to the lender and move out. Others wait until they are evicted after foreclosure. A small number tear up the house. While these people are turds, it is hard for me to sympathize with the bank that refused to investigate who they were lending to. People who tear up their foreclosed homes likely do not approach their other credit obligations in a responsible manner either.

[20thStDad]

Just leave it on the credit report and wait for it to go away. Bankruptcy is for people with income. Historically, poor people simply stop paying when times get tough. When Congress succumbed to the credit card companies in 2005 and tightened the screws on bankruptcy, the bankrupt simply stopped filing bankruptcy. They did not give any more money to the banks. This should have kept these debtors out of the credit markets, but the banks did not let their mistake with the bankruptcy rules stop them. They simply lent to these poor people with crappy credit in the sub-prime market. We all know how that turned out.

In the case of home mortgages, many homeowners simply mail the keys to the lender and move out. Others wait until they are evicted after foreclosure. A small number tear up the house. While these people are turds, it is hard for me to sympathize with the bank that refused to investigate who they were lending to. People who tear up their foreclosed homes likely do not approach their other credit obligations in a responsible manner either.

Are there different time periods that different kinds of debt drop off of your credit record? Is it less than the 7 or 10 (don't know) years you get with bankruptcy?

[retromodernjeff]

If one was smart and they are more than $100,000 backwards, you might just as well stop paying on it and stash that cash for whats heading toward us. Then let the foreclosure happen. You can't live as a slave to your FICO score. And the good part is that this is going to take 7 years at least to turn around anyway, so by that time your credit no longer shows the foreclosure. This ends up being your best choice.

[TJones]

If one was smart and they are more than $100,000 backwards, you might just as well stop paying on it and stash that cash for whats heading toward us. Then let the foreclosure happen. You can't live as a slave to your FICO score. And the good part is that this is going to take 7 years at least to turn around anyway, so by that time your credit no longer shows the foreclosure. This ends up being your best choice.

What are you going to do for the other 3 years after the economy has turned around, and you want to buy a house ?

[houstonmacbro]

I was a realtor in St. Louis, and I saw this dozens of times. Another thing I witnessed was the destruction of property by those being foreclosed on. They would take the appliances, toilets, tubs, heating units, air conditioning units, wiring, some would stip the house to the studs. Some would defecate in all of the rooms, on the carpet, and smear it all over the walls - horrifying.

The worst thing I saw was a mansion, literally 20,000 square feet with pool, poolhouse and servant's quarters where the owner's (noveau riche and then lost it) spray painted grafitti on all the walls, ceilings, carpets, marble flooring, skylights, appliances, fixtures, pool, pool house, servant's quarters - the whole nine yards. The bank had to have the structures gutted and start over. The pool had to be repainted. It was sad.

These are hard times.

I've also heard (not sure if it's true or not) of people pouring quick dry cement in the toilets and other drains to clog them up. Talk about madness.

[RedScare]

What are you going to do for the other 3 years after the economy has turned around, and you want to buy a house ?

You go buy a house. The FICO score is weighted more heavily to current credit events. Walking away from a mortgage 4 years ago will not be a backbreaker, especially if one used that savings from not paying the mortgage to keep all of their other debt current. While the bad mortgage will be a ding, all of the other good payment accounts plus the lower debt level overall will raise the FICO score. At any rate, the higher interest rate on the new mortgage will not be as big a money loser as the negative equity on the old mortgage.

If one is going to play fair, one must play by all of the banks rules. And that includes walking away from severely upside down mortgages. You might consider it dishonorable to walk away from a debt, but I can show you far more dishonorable practices by the banks. As they say, it's just business.

[retromodernjeff]

What are you going to do for the other 3 years after the economy has turned around, and you want to buy a house ?

With all the info available online regarding where we are going, I don't know why you would assume things are going to get better anytime soon. We are still at the beginning of it all. Rent rent rent for however long it takes. Wanting to buy and still buying when the time is wrong is bad business.

Redscare is so correct, people need to wise up and play by the banks own rules and not by the rules they tell you to play by.

[TJones]

With all the info available online regarding where we are going, I don't know why you would assume things are going to get better anytime soon. We are still at the beginning of it all. Rent rent rent for however long it takes. Wanting to buy and still buying when the time is wrong is bad business.

Redscare is so correct, people need to wise up and play by the banks own rules and not by the rules they tell you to play by.

Retro, you don't think it can be turned around within 7 years ? I thought Obama had all the answers for us. My logic is saying it will take 10 yrs. for that house to come off now instead of the old no.7. That is why I am saying 3 more years guys. Besides, about 75% of those losing their houses will never be able to buy one again because of this mortgage crisis. This 75% are the people who should have never had a mortgage to begin with, and they'll never have the 20% necessary to buy now.

Edited December 11, 2008 by TJones

[houstonmacbro]

Retro, you don't think it can be turned around within 7 years ? I thought Obama had all the answers for us. My logic is saying it will take 10 yrs. for that house to come off now instead of the old no.7. That is why I am saying 3 more years guys. Besides, about 75% of those losing their houses will never be able to buy one again because of this mortgage crisis. This 75% are the people who should have never had a mortgage to begin with, and they'll never have the 20% necessary to buy now.

I can't believe this is already being blamed on Obama.

President elect Obama has done more to put competent leadership on this issue than the current administration has done in the past 8 years.

And he's not even in office yet.

[TJones]

I can't believe this is already being blamed on Obama.

President elect Obama has done more to put competent leadership on this issue than the current administration has done in the past 8 years.

And he's not even in office yet.

I didn't blame him for anything, I was under the impression that he was to turn this around quickly, I think he could do it in less than 7 years, but others on this forum apparently think otherwise.

Edited December 11, 2008 by TJones

[retromodernjeff]

Might very well be a lost decade just like Japan in the 90's. Once we get to 0% interest rates like they did and then borrowing becomes like pushing a string. Obama, please, its his type of views that started it all in Congress and Billy boy. They think they can solve everthing with the same ideas that brought it on.