Why do people, who in all likelihood want the bank off their back, thrash a house right before...
they get foreclosed on. In theory, the higher the house goes for the less the outgoing family has to worry about mortgage repayment right?
Once you are foreclosed on, they stop coming after you for money, and consider the house a loss. They will recoup their money by selling it to a new owner. why would you pay a mortgage on something you no longer own? Your credit is going to be bad either way...
So, trashing the house is a middle finger to the callous treatment from the bank. In order to sell it, the bank will likely have to fix and repair all the damage you made. You are forcing them to spend money and work harder to sell it, once you've already moved on. To prevent this, most banks will offer you a small cash reward of around $1000-$2500 for not trashing your house.
It's too bad the banks demanded tax payer money to bail them out of their own bad investments and have little to no sympathy for their customers who are in the same boat. At the same time, it helps to think ahead and read the fine print when making large investments, like a house. It's a bad situation all around.
I disagree with jdflom, the bank may not come after you right away but if they do not get the the full value of their mortgage (because they have to take a short sale in order to sell the house) they can and will come after you for the deficiency claim. So trashing your house is stupid, even though it may feel good to give the bank the bird. In reality, you're shooting yourself in the foot, which is much worse than getting the bird.
Also, why is it callous of a bank to foreclose if you aren't paying them? And why it is always the banks fault? Get real. Everyone has an opportunity to read the terms and conditions of what they are getting into and even have a short period of time to rescind the deal after they buy.
BTW, I am not in favor of bank bailouts either, but let's be realistic and admit that people largely did not understand what they were getting into and it is their own fault for doing so.
by pgrundy8 years ago
This is hitting South Bend now, where I grew up. I have a house there with a renter in it that I"m about to lose:http://www.nytimes.com/2009/03/30/us/30 … y.html?hpwIt's so bizarre. The industrial midwest is...
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Which bank is better and why?Suppose you were considering depositing your savings in one of three banks, all of which pay 5 percent interest; bank A compounds annually, bank B compounds semiannually, and bank C...
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