Foreclosure 'home rage' in Las Vegas

Worth reading and watching: This Wall Street Journal story and video about "home rage" in Las Vegas -- when owners of foreclosed homes trash the place on their way out the door.

The story quotes a local agent, Joe Kraemer, who says vandalism and outright theft are the rule rather than the exception. "Washer-dryer, refrigerator? Always gone. No matter what."

Other common departure tricks: flooded houses, and the old cement-down-the-toilet trick. These are some angry former homeowners.

The story explains that this is why banks and lenders pay a kind of ransom known as "cash for keys" -- up to $2,800 in one Vegas example -- to persuade homeowners to leave without trashing the place first.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

Photo: Getty Images

Hat tip: Take Five, via e-mail, who saw the story on Housing Panic

Comments

[Shameful]

What kind of example does this behavior set for the children in the household? Theft is one thing, and an understandable impulse. But pointless vandalism? Why are these homeowners punishing the banks for their own mistakes?

[Laker]

This whole (subprime) housing should be flushed down the toilet. But wait, someone had cemented the toilet and the whole sewer line is clogged. Upon continued attempts to flush it down by the fed, Bernanke and our government, the sh** is backed up and starts to shoot out up.
Similar to the movie RV (with Robin Williams) when he tries to dump the sh** of his RV while connecting hoses.

That is hilarious. People can live rent free for about 6 months, and then trash the place and leave. Why would they give the keys for pocket change of $2800....
Banks should pay real money for the keys (preferably in EUROs), something like $20,000-50,000 for keys for a $600,000 house. Since a trashed foreclosure will fetch about 30% less than a great condition house.
But again, banks are stupid, so they will end up losing 40% or more...
btw: Why wouldn't the owner (loan owner) take his fridge? It is a simple appliance connected to the outlet.
Maybe the banks want them to leave their computers, TVs, DVD player too since they are connected to the 110V mains? What kind of BS is that? The loan owner entitled to take anything that is removable !
I think it is good for the economy, since the new owner will need to furnish the house, and buy brand new appliances...

[buz]

This is called theft and vandalism and should be investigated and prosecuted as such. And these are the poor "victims" that need taxpayor money. HA. The politician that proposes to bailout these greedy idiots will lose.

[E]

C'mon Pete. This is yesterdays news. Housingpanic.com already featured it.

[LeavinLA]

This is truly sad.

However, it's not illegal to trash your own house. Until the bank has possession, there's no real crime here.

A serious moral lapse, yes. A crime, not so much.

[Pasadena'ed]

This is just one more reason lending practices will get tighter and tighter as this big ball of crap continues to roll down housing hill (and no, it hasn't reached bottom yet). Lenders will need to bake the "cement-down-the-toilet" contingency into their rates and fees moving forward.

This is what happens when you practically "giveaway" seemingly cheap mortages to "anybody" with a pulse.

Greedy lenders + low-life pseudo-owners = crap filled boomerang

[Loooco]

Since when are washers, dryers and refrigerators considered fixtures? Of course they are gone, they are personal property.

I brought mine to my house and I will take them if I ever sell.

[Tejano]

My amigo bought a repo where the previous owner had taken all the drawers rather than pack up boxes!

[anonymous]

While it is not illegal to trash your own house, these people are trashing homes that have a mortgage. Ergo, they are trashing the bank's property. Unless you hold title free and clear, you are committing a crime.

If the house came with those appliances, the same applies.

The last I heard (November, 2007), the banks are prosecuting the individuals who do this.

[mike]

i paid an ex girlfriend to get out once without trashing the house...

guess what. she trashed the place anyway

[gary]

to LeavinLa.............great point.

[mark g]

Well, these are the people that put no money down, got free money, cashed in equity to buy cars, boats, vacations, 2nd homes... it fits that they live like rock stars and end up trashing their "hotel room"...

[Loooco]

"While it is not illegal to trash your own house, these people are trashing homes that have a mortgage. Ergo, they are trashing the bank's property. Unless you hold title free and clear, you are committing a crime."

Nope. You are wrong, troll.

A mortgage is a security interest in a property...it is not an ownership interest.

Try again.

[anonymous]

Loooco,
What's up with the name calling? These people do not own the homes they are trashing. They are partially paid for properties. Their actions are criminal.

[Kathryn]

This is obvious. Maybe in this new housing bubble there are people who will walk away without trashing a house, but usually foreclosures are trashed in some way or another.

A friend of mine is an electrician, and he's been working on a trashed foreclosure that was practically gutted- plumbing electrical, furnace, all wrecked, and fixture and appliance gone, window glass etched with obscenities, holes in the drywall, water on the wood floors, spray paint everywhere. And this is a house in a very nice gated community. Owners claimed they left the house unlocked and vandals must have done the damage. Didn't really matter, owners were divorcing and declaring bankruptcy. I don't think the bank had any way of prosecuting owners for doing this- they don't have the money and it's hard to prove they actually did the damage.

I just think for most average homeowners, buying a foreclosure is a bit of a risk. Who knows what was done to the house or what the quality of the repairs were.

[Digitalian]

I'd be curious to know from any legal experts out there at what point does this kind of thing legally become vandalism of the bank's property? I would think that once the occupant has been given notice of foreclosure that they would no longer have the "right" to trash the home even if the bank allows them to stay for months afterwards.

[Rob]

Next stop.. Tweakerville, where copper is still $3.50lb. bolt cutters are extra and squatting is an option.

[Loooco]

anonymous,

When you can cite some law that supports your assertion, I will apologize for calling you a troll. Otherwise, if it looks like a duck and it quacks like a duck...

[Doug]

Looco: Anonymous at 1:35 p.m. is partially right.

I can't say if trashing your mortgaged home is a crime, but it is a civil wrong.

Quoting from Miller & Starr "California Real Estate 3rd":

"Any person who has an interest in real property that is subject to the lien of a mortgage or deed of trust has a duty not to do any act that will substantially impair the lienor's security, or that would constitute waste. This duty is imposed by law, independent of the covenants in the deed of trust . . ."

"Waste is the destruction, misuse, alteration, or neglect of real property by a person who is in lawful possession to the injury of the interest (or estate) of another in the property."

In California a lender's remedies for ordinary (non-malicious) waste are limited. It can sue the borrower/owner for damages only as part of a judicial foreclosure action, and can recover only to the extent the value of the property is less than the amount owed + costs of foreclosure. Damages for ordinary waste cannot be recovered as part of or following a trustee's sale, which is the foreclosure method used 99.9% of the time.

A lender can sue for bad faith (malicious) waste without a judicial foreclosure, but again is limited to the amount the property is worth less than the amount owed + foreclosure costs. A lender that followed sane underwriting practices in a steady housing market might have trouble meeting that damage threshold. However, it should be no problem in the current foreclosure scene.

Appliances are personal property (built-ins like wall ovens may be different). Not sure how appliances are treated, but would imagine they can be removed by the owner unless the mortgage also specifically includes them. Extension of a mortgage lien to personal property is not uncommon in secured business loans, but I would be surprised if it was used for a dwelling unit.

[Chris]

I live in the Phoenix area and in my neighborhood the foreclose rate is very high. This is definitely going on here, with people taking appliances and anything that isn't nailed down (and some things that are nailed down). The wife and I went for a walk over the weekend and saw one of the vacant foreclosed homes where someone has taken the garage door. I don't know whether it was taken by the previous owner or by someone after they had left, either way it is pathetic and these people should be prosecuted and sued for the damage.

[hugh jorgan]

Yo Loooco,

CA Penal Code 459

If the place has been forcelosed, then the bank owns the propoerty. It is burglary by definition.

[Cal]

http://www.reuters.com/article/wtMostRead/
idUSN2527885420080401

"Some homes worth less than their copper pipes"

There is gold in dem dere walls. Don't tell the homeowers, it'll give them some ideas.

Darn homeowers!

[John]

For those wondering about the legality? The owners have a legal duty not to waste the property. At a minimum, it's a tort, I believe.

I any event, it's a pretty low class form of behavior. Just think of all the decent people out there that still have a dream of owning a home some day. The Las Vegas home trashers are just hurting all future buyers. Look for 20% down payments required at some point in the future. People with real money at stake wouldn't act that way.

[Melinda]

This trashing of a place is not new, but it is also what is going to make the situation worse. Having dealt with rentals, and having to evict for non-payment of rent over an extented period of time, this has happened in the rental arena for ever. The ability to collect on the damage for either a rental or for a repo'ed home makes costs for everyone who is responsible higher. Many of these people are legally responsible, but financially unable to pay. That is what got them in the problem in the first place. Who will want to rent to someone who trashed the home the left. So when a landlord finds out that the former home owner trashed the home, what are they going to think will happen to property the prospective renter does not have a vested interest in? Sad as this is, it grows out of frustration in a situation where people feel they have no out and a lot of anger and blame with no tangible target. It is a cycle and one that will take time to break.

[tew]

There are no consequences either.

It's like an ordinary theft. Get caught doing it alone and you get arrested. Join a riot and haul off high priced goods in front of TV cameras and you're probably OK. Strength in numbers. These people know the banks are a) too overloaded to file police reports and b) are usually servicers and aren't as concerned about the home condition, since the note holder is the one getting crushed.

And the government wants supply off the market, so vandalism helps.