Freeloaders enjoying the entitled life are not confined to subprime areas. Today's featured property may be the worst case of housing entitlement in the country, and it is right here in Irvine.
Irvine Home Address … 14 BLUEBELL Irvine, CA 92618
Resale Home Price …… $469,900
{book1}
The mountain is high, the valley is low
And you're confused 'bout which way to go
So I flew here to give you a hand
And lead you into the promised land
So, come on and take a free ride (free ride)
Come on and take it by my side
Come on and take a free ride
All over the country, I'm seeing the same
Nobody's winning, at this kind of game
The Edgar Winter Group — Free Ride
If people get to have free rides, don't you want to be one of them? Looks like great fun to me. I can see why everyone wants to own a house in California; you get a nice entitlement during the rough times, and you get free money during the good times. Where do I sign up?
Recently, I exposed The Face of Housing Entitlement Today.
… from the LA Times article Many borrowers in default live for free as lenders delay evictions:
Despite being months behind, many strapped residents are hanging on to their homes, essentially living rent-free. Pressure on banks to modify loans and a glut of inventory are driving the trend.
[Patricia and Eugene Harrison, who bought their Perris home seven years ago, have lived there since October 2008 without making any payments on their mortgage. (Irfan Khan / Los Angeles Times / February 19, 2010)]
Do you think any unemployed renters who are failing to pay rent are living that well? Full dinner plates, a solid roof, mementos and permanent storage, comfortable surroundings; we endow these entitlements on those who own. …
If you can sign your name to a mortgage, you no longer have to fear homelessness, and your level of entitlement increases significantly. …
[Pictured above: Unemployed renter and family who failed to sign loan documents and squat in a house]
Many people astutely observed that squatting is more common in Riverside County, mostly due to higher levels of unemployment, but Irvine is not immune to its effect. In fact, people squat in Irvine houses just as they do in the valley of the dirt people, and in the case of today's featured property, it is much, much worse.
Irvine's Housing Entitlement 
I first profiled today's featured property back in September of 2009 in the post Bluebell, a shocking example of gaming the system here in Irvine.
- The owner of today's featured property paid $465,000 on 10/23/2003. She used a $372,000 first mortgage, a $93,000 second mortgage, and a $0 down payment.
- On 12/30/2004 she refinanced into an Option ARM for $486,500.
- Two months later on 2/3/2005 she opened a HELOC for $67,000.
- Total property debt is $553,500 plus 3 years of missed payments, negative amortization, and fees.
- Total mortgage equity withdrawal is $88,500.
Consider what this woman accomplished:
- She put no money into the transaction. None.
- She extracted $88,500 in just over one year. That is nearly the median income in Irvine, and that money came to her without tax withholding.
-
She has lived in the property since 2003, and in the full term of ownership, she has not made payments totaling what she pulled from the property.
I admit to feeling foolish. I looked at property in late 2003, and I deemed it too expensive. It never occurred to me that anyone could accomplish what this woman has done, or I might have followed in her footsteps. I feel like an idiot struggling to actually pay for my housing costs when I could have obtained a free ride for the last seven years. I hope lenders know that California borrowers are learning their lessons well.
Foreclosure Record
Recording Date: 02/08/2010
Document Type: Notice of Sale (aka Notice of Trustee's Sale)
Foreclosure Record
Recording Date: 12/03/2008
Document Type: Notice of Sale (aka Notice of Trustee's Sale)
Foreclosure Record
Recording Date: 08/28/2008
Document Type: Notice of Default
Foreclosure Record
Recording Date: 08/08/2007
Document Type: Notice of Rescission
Foreclosure Record
Recording Date: 05/25/2007
Document Type: Notice of Sale (aka Notice of Trustee's Sale)
Foreclosure Record
Recording Date: 01/24/2007
Document Type: Notice of Default
As I noted six months ago:
The owner of this property stopped making payments sometime in late 2006. It has been over two and one-half years [now three years] since this owner stopped paying, and she is still listed as the property owner, so one can assume she still occupies the property. That is two and one-half years without a housing payment—a bill we will all pick up as taxpayers at some point. How does that make you feel? Did you pay for your housing since 2006? I did.
The place looks very lived-in. Despite not paying a mortgage or rent, the owner looks in no hurry to leave.
It is a mess but not a packing mess…
How many of you who have been paying for your housing are living this well?
Irvine Home Address … 14 BLUEBELL Irvine, CA 92618 
Resale Home Price … $469,900
Home Purchase Price … $465,000
Home Purchase Date …. 10/23/2003
Net Gain (Loss) ………. $(23,294)
Percent Change ………. 1.1%
Annual Appreciation … 0.1%
Cost of Ownership
————————————————-
$469,900 ………. Asking Price
$16,447 ………. 3.5% Down FHA Financing
5.00% …………… Mortgage Interest Rate
$453,454 ………. 30-Year Mortgage
$97,297 ………. Income Requirement
$2,434 ………. Monthly Mortgage Payment
$407 ………. Property Tax
$150 ………. Special Taxes and Levies (Mello Roos)
$39 ………. Homeowners Insurance
$114 ………. Homeowners Association Fees
============================================
$3,145 ………. Monthly Cash Outlays
-$402 ………. Tax Savings (% of Interest and Property Tax)
-$545 ………. Equity Hidden in Payment
$32 ………. Lost Income to Down Payment (net of taxes)
$59 ………. Maintenance and Replacement Reserves
============================================
$2,289 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$4,699 ………. Furnishing and Move In @1%
$4,699 ………. Closing Costs @1%
$4,535 ………… Interest Points @1% of Loan
$16,447 ………. Down Payment
============================================
$30,379 ………. Total Cash Costs
$35,000 ………… Emergency Cash Reserves
============================================
$65,379 ………. Total Savings Needed
Property Details for 14 BLUEBELL Irvine, CA 92618
——————————————————————————
2 Beds
1 full 1 part baths Baths
1,508 sq ft Home size
($312 / sq ft)
2,000 sq ft Lot Size
Year Built 2000
4 Days on Market
MLS Number S608286
Condominium, Residential Property Type
Oak Creek Community
Tract Acac
——————————————————————————
LIVE THE DREAM IN THIS MAGNIFICENT 2 BEDROOM PLUS LOFT/OFFICE, 2.5 BATHROOM OAK CREEK HOME. SOME OF THE MANY FEATURES INCLUDE RICH, STRESSED HARDWOOD FLOORS THRU-OUT MAIN LEVEL, 2 MASTER SUITES, CUSTOMIZED WINDOW TREATMENTS, STAINLESS STEEL APPLIANCES, LARGE CENTER ISLAND WITH BAR TOP, TILE COUNTERS, PLUS A PRIVATE BACKYARD, WALKING PAVERS AND LUSH, MATURE SOFTSCAPE. DON'T MISS OUT ON THIS BEAUTIFUL HOME!
Live the dream? Yes, my dream is to live in this house for several years at no cost. Can you do that for me?
BTW, what is this picture supposed to show me? And are you tilting your head to the left?
Living the dream indeed. And you could add, the bank seems to be in no hurry to put this place on the market either.
Obviously, this person should probbably be in prison. But at the same time, as with any accomplished criminal (a la Madoff) I am a little in awe at the extent that such brazenness can accomplish. I would really like to talk to this person, and hear the litany of excuses as to why they haven’t done anything wrong. In fact, it would surprise me if she were a poster here at IRB, nursing her sense of entitlement and a grudge against the ‘banksters’ who were so foolish as to entrust her with their (or our) money.
I mean, it would *not* suprise me.
“And you could add, the bank seems to be in no hurry to put this place on the market either.”
We could all thank the FASB for helping to make these people live for free for so long.
Thank you mark-to-fantasy.
Thank you Alan Greenspan! Thank you Reagan! 30+ years of Keynesian economic theory has ruined this country.
At least we are blaming the correct people now for the outrageous inflation that took place over the last 30 years which never showed up in CPI. I am talking inflation in house prices, education, health care, autos, etc. All life essentials most people use debt to buy or don’t pay for (health care).
Huh? One could plausibly make the connection that the credit bubble (which was a 21st century phenomenon) caused temporary ‘inflation’ in housing prices (which is of course now being corrected. But autos? Uh, no, I don’t think so.
Try to get the economists straight…I think you mean Friedman or Hayek, not Keynes. Keynes is what we are experiencing now. Actually, I’m not sure your comment makes any sense at all.
Take out HELOC -> buy an otherwise unaffordable car
Demand increases.
As to the article, is there no blame on the mortgage underwriter? Here it is in the original article:
“They said they applied for a loan modification with Countrywide Financial”
Oh, it’s Countrywide. A company that didn’t care whether they could pay it back since they were shovelling off the mortgage to some Wall Street to be sold off. Everyone got their cut along the way.
Chris, you are right about FASB…but to be fair, they wanted stronger MTM standards, but were forced to back down by our current Democratic Congress. At least they didn’t totally fold like the IFRS crowd.
Your ire is misplaced. FASB controls accounting standards. The REAL CULPRIT is the regulator. Ask any examiner and they will tell you the same thing. Non performing assets do not drive accounting, an accounting does not drive non performing assets.
The real questions is why has the bank not foreclosed on this? It’s clearly a non performing asset.
PS. I am an accountant and stand by the FASB rulings. However, they have nothing to do with asset management, only GAAP.
Interpretation of FASB 167 and 168 has everything to do with the woman staying in the home mortgage payment free. The SEC and the AICPA provided the interpretation that the banks can mark-to-make-believe rather than mark-to-market. This benefited, and still benefits the bank to not foreclose, they simply send out a NOD, as in doing so they avoid a charge to their income statement and reducing the balance sheet. It’s what is called complicity in a crime. Then the Fed has taken a lot of mortgage backed securities off the banks hands and swapped out US Treasuries. This has monetized stocks and corporate bonds and even municipal bonds with retail companies like Sears-KMart soaring dramatically over the last year. In so doing there was another crime, the Fed socialized losses to the tax paying public and privatized profits to the finanical companies and traders who were wise to go long stocks or gold. But since March 23, a dollar carry trade has been on; the US Dollar fell today to 79.70 and will continue to fall lower. Soon the stock and bond markets will sell off because the Fed has used up about all of its Quantatative Easing funds, and then all economic chaos is going to break loose … and it all goes back to the SEC and the AICPA allowing mark-to-fantasy …. one can visit the linked blog articles for more details.
“In fact, it would surprise me if she were a poster here at I[H]B…”
Okay, you got me: It’s my house – or it was my house, at least a little bit, even though the bank really owned it the whole time.
I’m basically your worst nightmare. I think that all property should revert to the state. I raise my kids to be secular Marxists – with a little bit of the Koran on the side, in sensitivity for the oppressed. I used to be a developer of McMansions, but I sold stated-income mortgage loans on the side.
The only thing I find more disgusting than apple pie is motherhood: Bleah!
You may have seen me in the area. You know, the guy with the thick, bushy eyebrows, sort of a cross between Barney Frank and Josef Stalin, in Birkenstocks at Starbucks, trying to pay for my latte with food stamps while NPR blasts from my SUV – the one with the 8-liter V10 and the “Save The Planet” and “Keep Tahoe Blue” bumper stickers.
I’m oppressed myself: nothing which has ever happened in my life has ever been my fault.
Now, if you’ll excuse me, I need to trim my hedge with the lawnmower, spill McDonald’s coffee in my lap, and race my Prius around on the freeway. These lawsuits won’t file themselves!
laughed until I cried…thanks for making my day.
It shouldn’t surprise you. I think the “owner” did a great job living there for free. In fact, I would very much like every single person underwater by $100,000 or more to simply STOP paying anything, and see how the system likes that.
When I decide to default on my property, you can bet your sweet a$$ I’ll live there as long as possible before being thrown out. That includes filing BK right before they auction to extend it. Extend and pretend, it’s the same thing banksters do, why do you support them but crucify ordinary people. For every person living and reading this, if you voted for republican or a democrat YOU deserve everything you get. Suck it up SHEEPLE.
Note to file: Please be sure to keep Swiller away from sharp knives and blunt, heavy objects.
Swiller was right on the money here. Two standards: one for crooked banksters and one for the Little People. Now the Little People are waking up and recognizing that they can game the system too! Cruel irony and poetic justice for the banks.
If you aren’t actually Swiller then you are an idiot also — yes, that’s a great idea, let’s encourage people to rip off the banks and destroy the banking system further. I’d love to be around when you lecture your children on ethics and morality.
Amazing story indeed!!!
“I would really like to talk to this person, and hear the litany of excuses as to why they haven’t done anything wrong”
But, but… They haven’t done anything wrong! The just play the game. Why not? It is you, the taxpayer who picks up the tab. Unbelievable!!!
The Harrisons may or may not be morally “wrong”, depending upon you POV, but one thing is for certain: they haven’t done anything illegal. And the banksters have taught us that legality and astute gamesmanship, not ethics, is all that matters in the new Ponziconomy.
The Harrisons have simply learned to game a (very rigged) system to their advantage, following the example of Wall Street. If they were working for Goldman Sachs, they would be eligible for a large taxpayer-provided bonus, a promotion and a job at the SEC.
“Obviously, this person should probably be in prison.”
Obviously, you are a moron. Prison is for people who have broken the law. What law has this person broken? The bank issued the original and subsequent loans. The bank has the legal right to reclaim the property and has so far refused. How does that equate to a crime committed by the owner?
It’s ignorant people like you who are ready to start a new witch hunt based upon your own envy.
It’s ignorant people like you who are ready to start a new witch hunt based upon your own envy.
Agreed – Freetrader is obviously a “jealous, bitter homedebtor” who envies us “rich renters” and market-savvy bandos. 😉
Thank you for bringing some reason to this discussion. 100% dead on.
Finally a sensible statement. ‘User’ you are correct, this homedebtor is playing within the rules of the game. Sure, she didn’t make any payments, but she did not break any law. She’s in default, and there are legal guidelines for that. Quit being jealous and mind your own business, all you haters.
Ah, yes, Swiller, or ‘user’, that’s right, I am a moron. How about lying on a mortgae application? Is that legal? Think before you speak, jackass.
Where does it say she lied on the application? You really are on a witch hunt.
Envy? Why should I envy a deadbeat any more than I envy an unemployed relative? I have a home in Irvine and one in the Bay Area that I’ve essentially paid off — so if I am feeling anything it isn’t envy, it is anger at the people who have screwed up the system for the honest people out there; although to judge from the comments from ‘user’, HARM, Swiller, and the endless list of deadbeats whose foreclosable properties make up this blog, there are an endless supply of clueless, ethically-challenged, potential criminals out there.
Anyone who doesn’t think like you is a potential criminal — and you’re calling people on this board clueless.
The bank approved the loan and it is the responsibility of the bank to foreclose! This person must pay very close attention to the crooks at fannie mae and freddie mac and the Fed!
If anyone should be in prison it’s the senate, congress and the goofs occuping the White house.
Its shelter. Not an investment. Yet, a lot of people drank the kool aid like the tech stock mania of the 90’s.
I read about this couple in another news site and they kind of sugarcoated the article for the couple. I hope the exposure kicked them out.
Thanks for the giggles. You are on a roll, sir!
This article isn’t Irvine, but I think it’s interesting nonetheless.
Link
Most notably this quote… The buildings are mostly full. RREEF opted not to keep making debt payments and funding operational expenses after their value had been cut in half in recent years to well below what is owed on them, according to sources.
If banks themselves aren’t interested in making payments on their obligations, what makes anyone think ordinary people should?
Bad link, it just shows:
Microsoft VBScript runtime error ‘800a0005’
Invalid procedure call or argument: ‘Mid’
/_includes/en_de_code.asp, line 37
I wouldn’t know; I’m paranoid when it comes to clicking any links with “bj” in the URL while I’m at work.
Even if it is a Business Journal, I’ve been burned too many times. 😀
Sorry folks here’s the real link.
http://www.ocbj.com/industry_article.asp?aID=07634974.7480633.1894360.5826346.9016135.914&aID2=145711
The other side to this story is that it’s 2010 and the price is slightly higher than the 2003 price.
The current price is at or below rental parity. What would this rent for $2300 – 2500 / month. What will this sell for, $500k is my guess.
That’s almost as sad as the free loading story. I understand the anger, but not the anger directed at her. What did she do? The bank is letting her live for free. The bank is under no obligation to give her free rent.
One more thing, I highly doubt the person who buys this particular condo will be using an FHA loan. It will be a $100K down payment. Welcome to Irvine.
I bet she is still paying her HOA. If she wasn’t they at least would have had her evicted in no time.
I’m fact I have no problem with her not paying the bank as long as she still pays the community dues. Eventually the game will be up. She is very lucky. Must be Irish.
Maybe you don’t have an issue with her living off the rest of us rent free but I sure as hell have a problem with it!
Your mistake is in compartmentalizing the issue. It’s not just the bank’s problem, it’s a systemic problem. In case you missed it, the taxpayers, that means you and I, bailed out the financial institutions to the tune of hundreds of billions and likely trillions of dollars. That’s OUR money. Not the bank’s money. It bears noting too that this particular lien holder is Chase, one of the largest of the beneficiaries of our taxpayer funded bailouts.
SO, try thinking of it this way, that woman is stealing from you, me, your kids and my kids. Pissed off now?
You’re right about one thing. She is lucky. Lucky this whole thing melted down like it has swamping the system that, under normal circumstances, would’ve booted her out literally years ago. Sure, she’s living on borrowed time (pun somewhat intended) but if the banking system weren’t still on such shaky footing, she’d be cooked. The fact remains, “her” property is one of thousands sitting on that shadow inventory list that the banks can’t foreclose on because then they’d have to recognize the loss.
LOL!!! ROFLMFAO!!! If you are upset about someone living for “free”, do your brains spill out that ILLEGAL ALIENS are getting welfare and public support?
Fix the system. Attack the banksters and the problem, stop attacking people. I would hope you are foolish enough to confront these THIVES, I mean after all, STEALING is against the law, why don’t you call the police and have that person arrested.
You are part of the problem as well, not the solution.
Swiller, why do you have to be on the wrong side of every single issue? We can debate the illegal alien issue ad naseum, but one thing is for sure: they aren’t lazy, and they aren’t one welfare. They are in fact the most exploited group, since they are under the radar. Only citizens get to lounge around on welfare at the expense of the taxpayers.
How about directing that anger at the politicians who voted for the bailout? They are the ones who are forcing you and your kids to pay, not her.
She didn’t ask for the bailout to pass, and the bailout didn’t put money in her pocket; it put it in the pocket of the banks.
Speaking of banks, since they got that bailout money, how come they haven’t foreclosed on her and swallowed the loss? That was what the money was for. They are so greedy they want the bailout and no losses too.
So stop pointing the finger at her. What do you expect her to do, move out and start paying rent? How would that help ease you and your childrens’ future tax burden?
user, ‘use’ your brain. She, and people like her, were the reason the bailout was necessary in the first place. Were the banks criminally stupid? Sure they were, just like a bank that leaves it’s doors open so anyone can walk by and grab the cash. But that doesn’t excuse the crooks who actual steal the cash.
No, the reason the bailout was necessary in the first place is because people like you think the banks should be saved from their own stupidity, but stupid people like her should be thrown in jail.
And once again, she didn’t steal anything, as stealing involves taking something without permission.
The banks gave her permission to live in that house, and when they decide to kick her out, I’m sure she’ll leave.
You are being rather simple minded. The bail out was at the end of the process and really has nothing to do with what caused it. You can’t say the bail out caused the financial crisis any more than you could say the atomic bomb started World War II.
Anyway, the signed loan docs promising to pay money back that she apparently never intended to. The term for that is fraud, which is a crime. Keep in mind it is all the refinancings where she actually took out cash that is really the issue here — that was outright theft.
Not only is this property not a short sale (which taints your
entire article) but it has been on the market since November, 2008.
The icing on the cake would be if this woman rented out the property…maybe she did. Collecting $2300/month for years for doing nothing.
Business savy like that is hard to find, I would hire her in a second.
IR,
Is the “owner” playing the “single mother” card?
In the new entilment game
1. Banksters >
2. Corp. >
3. Single mother >
4. Senior women >
5. Senior man > ….
The homeless family shows a man, women and kids out homeless. Women with kids and husband get almost no break in this PC world. So it’s eviction for them. The nuclear family in the car are likely beyond 10th down the list.
The banksters do what is in their personal best interest. That’s usually not the best for shareholders. It was likely in their personal interest to refinance at above the original loan. Another 0.3% in commission/fee for them. (They don’t get penalized with a negative commission for bad loans.) Too bad the bank is temporary stuck with the loss. The bank will pass on the loss to the US govt/taxpayers, who will unsucessfully try to pass the loss to PRC or other trading partners via T-bills and currency devaluation.
I say rental for this place should be $1700 to $2200.
I feel stupid to have paid off my loan for rental properties and paying rent. I could so been living the CA dream of free rent as a non-paying owner.
It’s interesting to see someone at this income level able to stave off the bank for this long. Over at the Coto Housing Blog, you regularly see higher priced homes with 10+ more auction cancellations, some even as high as 20! I had attributed this to higher income homedebtors with some ability and resources to game the system, along with attorney connections that helped to slow the banks progress on foreclosure down to a crawl. Perhaps it’s not a function of delaying tactics but one of ineptness. Granted, the Option ARM loan is likely being counted as a 100% valued loan on Chase’s books – what with deferred interest also being called “income”, so they may not be in a hurry to tear the band aid off this scab.
My .02c
Soylent Green Is People.
Remember, Tuesday is Soylent Green Day!
Hey soylent, way off topic, but by any chance do you ride a Husqvarna?
Way off topic for certain! I ride neither their motorized vehicles nor their chain saws. I do have a 4WD vehicle and play with it as God intended it to be used. Gone mudding in Holy Jim Canyon recently. Perhaps it was your Husqvarna I ran over on the way out? JK. Cheers!
My . 02c
Soylent Green is People.
To IrvineRenter or anyone out there,
Would somebody compile a book of these cases and send it to our leader in D.C., Barry, Big Ben, Tim,…?
Tell them we appreciate them very much on how they have been spending our money.
Start a movement.
Remember…No fair representation –> no taxation. Isn’t that stated in our constitution?
If we were to stop paying taxes, they would have no money to spend stupidly. Maybe they’ll get wiser.
The bank is the one that is refusing to foreclose, not the government. Sure, there are incentives to do loan mods and the TARP money and whatnot, but in the end, it comes down to the bank not wanting to foreclose for their own reasons. It’s also possible the owner is using legal processes (bankruptcy, etc.) to delay things.
Sure, but it is Bernanke’s and the government’s “help” that allows these banks to do this. The market was forcing foreclosures as banks needed the cash. But they can now take their time, no pressure.
The pressure will slowly come as more and more people stop paying. And more and more people default strategically. If the banks are not going to foreclose on you, then the word spreads and more and more people stop paying. I know several people that chose to do so.
Anthony,
All the clowns you mentioned (the O-man, Helicopter Ben, the Turbo Taxer, etc) are all complicit with the theft going on. They don’t give a crap if your tax money goes to the banksters or bails out deadbeats. It’s in all their best interests to drag this mess out as long as humanly possible. O’s job is to get re-elected. Ben and Turbo’s job is to get reappointed. Their jobs are much easier if the can is kicked down the road and the train wreck is postponed for another day or the next administration.
I can’t think about these people like her without the bile rising to my mouth I get so angry. There’s nothing special about people like her and they’re certainly no smarter than the average foot stool but they sure as hell were born under a lucky star.
IrvineRenter was spot on comparing the fate of this homedebter as compared to a renter. You can bet your kids college fund that a renter doesn’t get that kind of forgiveness so, of course, it begs the question why do people like this criminal get away with it?
I want to see, among half a dozen other things, radical change in credit rating for people like this. The circumstances should be clearly detailed in her credit record making any form of loan forgiveness or credit score rehabilitation painful if not impossible. As in all these cases, people who abuse the system to the point of criminality should be permanently removed from access to credit outside of a high rate credit card and perhaps a car loan.
The possibility that these thieves will not only get away with this but worse, will eventually be kicked out of the property only to return to the home buying market a few years down the road really angers me. Because I did the right things for myself and my family, I shouldn’t have to compete for a home or access to credit with these leeches.
Your envy has clouded your mind.
She is not a thief. Thieves take things without permission. They break laws. What laws has she broken? What has she taken without the permission of the owner?
If you’re upset, try to get the laws changed, but stop acting like she is a criminal because she does what you “don’t like.”
What do you expect her to do? Move out and pay rent out of some sort of civic duty? How would that help the economy any more than spending that money on a new car? The banks are the real thieves. They lobbied for bailout money, which they received, then refused to use to pay for the losses incurred by foreclosing on people like this.
User, my six year old knows better than to attempt that kind of defense — she wasn’t ‘given’ money, she ‘borrowed’ money — then decided the not pay it back. There is a definition for the kind of person, and it is ‘thief’.
There is certainly nothing to ‘envy’ in this person’s life — she is a pathetic creep and our prisons are filled with people with better ethics.
Freetrader:
I agree that it isn’t ethical, but in January 2009, JPMorgan used the same argument to return 5 office buildings to THEIR financiers. It was a purely unemotional business decision. See my posting “2010-03-17 05:44 PM”.
She was not given the money, as you claim; rather she pledged a house or property against a loan from the bank. It is their choice not to foreclose right now. It’s possible, too, that like others, nobody is really sure who holds those mortgage papers because it was likely diced and sold as quickly as possible to unsuspecting investors and the paperwork was buried in the rush through the system.
Ethics has nothing to do with it, and as long as you carry this Puritan notion, there are certainly many who will take advantage of your Victorian ‘principles’.
There is LAW, and there is JUSTICE. The two are not the same.
As I understand it, MS returned the properties to the financiers. No problem, they aren’t still occupying the properties.
The issue isn’t whether we can make a bad business decision and live on — we can. But if the financiers could prove that MS intended from the beginning to walk away, you are damn right there would be hell to pay — that would be fraud.
Therein lies the difference. This woman committed fraud by taking money she had no intent — or means — to repay. It was the bank’s self interested obligation to ensure that the person they loaned the money to could and would repay it — and for various reasons, they obviously failed to. That doesn’t mean the woman gets to keep the money and the property, or that there shouldn’t be consequences for her actions. I agree though, with your final point — behaving fraudulently is one thing, proving fraud another. The fact that someone deserves to be punished for their destructive behavior doesn’t mean that they will be.
Okay. I grant you the first point; MS did return the property to their financiers with little fanfare or legal action; however, they did exactly what the banks and media insist you must not; that is, walk away from your responsibility.
On your analysis of the difference, though; until the foreclosure is finalized, ownership of the property remains with the indebted person named on the title. Only after foreclosure, is the deed transferred to the mortgage holder. If they choose not to proceed, who is at fault? She is basically challenging the banking system and the next move is theirs. What she does with the money she might have paid against the mortgage has no bearing on the technical issues of the mortgage agreement.
In the current situation, social and economical, maybe the bank feels that it’s better to at least have a custodian on the property who is presumably still paying the utility bills than to leave it vacant, neglected, and prone to vandalism until such time that they decide they can at least cover their cost in foreclosure.
I also find it disturbing since I have always paid my bills, but my moral judgment is irrelevant to the legal issues, and in a deep part of my being, I sort of admire the renegade.
She didn’t borrow money. Borrowing money is when you, you know, receive money.
One more thought.
I’ve mentioned this before here on a couple of occasions, my pet theory on why I keep seeing restaurants full and new BMW’s and MB’s tooling around.
My theory is this … hundreds if not thousands of “homeowners” are defaulting on their mortgages and simply not making their payments. Whether via financial advice or in an effort to force their bank into a modification program, there are thousands of people gaming the system like this woman. As a result, they’ve now got $2000-3000 extra per month to pump into the SoCal Conspicuous Consumption Lifestyle.
This property profile partially supports my theory. I can’t prove or even speculate what this woman is doing with the few thousand dollars she’s NOT paying to the bank but it’s a fair bet she’s not pumping it into a savings account. So why not take the “windfall” and pump it into a new Bimmer or maybe a couple Louis Vuitton handbags or even a new wardrobe? When the sheriff shows up to bounce you outta your house, they can’t take your car or your clothes right? So now you can go rent and look down your nose at your fellow renters while you jump into your new E-Class.
Ah, the joy of non-recourse loans!
“But housing is special! People need a place to live, right?”
In places like California where real estate never goes down, banks don’t need recourse because they have the home as collateral and could easily sell to make up for any loss. 😀
There are big changes down the road for housing/RE and mortgage industries.
I’m not a lawyer. IMHO, I don’t see anything criminal going on with her gaming the system (banking and the law) with the bankster’s help. The banksters may be acting criminally. Ethics are another matter.
Her best bet for the 2 years for free rent would be to save the money and use it for rent money if and when she’s kick out or go on section 8 if all the money was spent. Who know CA may have her rent the same place.
IR, How is she keeping the bank at bay? Or is the bank just accounting the free rent as income/receivables ?
This is kind of like when someone steals from a store over and over, the store knows that they do it but don’t call the cops. The store (aka bank) is at fault nearly as much as the criminal.
In this case, the banksters are getting a fee or bonus with each new loan and leaving the owner (shareholder) with the long-term loss. For the short term they’re still making a profit $$$$,
rentfree,
You’re right. I have to work for housing — I wasn’t smart enough to game the system and be able to sleep at night.
Don’t be jealous! Don’t you wish you can live rent free like me?
>>>BTW, what is this picture supposed to show me? And are you tilting your head to the left?<<< Hmm, maybe they're trying to emphasize a connection to the Joker or the Penguin's hideout. Didn't those always tilt to the left on the Batman TV series?
Read this article from December 2009 and tell me why you, or any other debtor, must live by different rules or accounting decisions than the banks set for themselves.
http://www.businessinsider.com/morgan-stanley-just-walks-away-from-five-san-fran-office-towers-2009-12
Looks to me like Morgan Stanley walked away from the property. They aren’t still living in it.
to have a crooked financial system u need to have obidient slaves….
bravo to those people… every taxpayer should do the same
I hope everyone underwater does exactly what this person did and break the system. Nothing ever seems to get fixed unless its broken.
If you think that part of the dream is to be afraid that you’re going to get a foreclosure notice in the mail at any time, and you’re scared to death you’re going to lose your home at any time, I guess you could say, yes, we’re living the high life.
I’ve been in modification hell for the past year, struggling to make payments I can’t afford to keep one step away from the foreclosure process to save my home.
Try having sleepless nights as you worry how you’re going to come up with that next payment to keep the foreclosure wolves at bay. Try having crying jags daily and feeling sick to your stomach from the stress of it all.
I’m sure this woman is scared to death. How dare you judge her? You self righteous homeowner haters need to grow up and learn some empathy!
The real criminals are the banks that created these exotic loans with terms that even they don’t understand to peddle to their Wall Street buddies, all of whom are sitting pretty right now with fat bank accounts, completely uncaring of the carnage they’ve caused.
Dear Angry Homeowner:
First of all, nobody wants to pile on to someone who is having a rough time. That said, the person who ‘owns’ this particular property deserves no sympathy. You say you are having a difficult time yourself. If you have cancer, or lost your job, I have sympathy for your situation. If you simply bought a house that you couldn’t afford because you somehow assumed that the ‘teaser’ reverse amortization rate would allow you to stay in it until the value increased and you made a killing, well, I have much less sympathy for you. You aren’t a criminal, but you’ve made a serious mistake.
Unfortunately, you display the tendency of so many — you have made a mistake, but instead of taking responsibility for your actions, you try to find someone else to pin it on. “Wall Street” whatever that is, is the designated whipping boy these days. Maybe rightly so. But that doesn’t absolve you from the actions of your behavior.
You ask “How dare [I] judge” someone who behaves irresponsibly? What a silly comment. As a tax payer I certainly do have a right to judge those who have made it difficult for the rest of us, just as I have a right to judge a drunk driver or any other living train wreck who causes society harm.
People have a right to be angry about what is taking place around them. The anger is not an issue of envy. I do not envy that woman, but I am angry. I am angry at a perverted system where those who contribute the least to society, and who take the greatest advantage of other people are rewarded the most. . . at the cost of everyone else. The system must change.
I hope there is a revolution coming that will tear this perverted system down. It will pit those who game the system against those who want freedom and equality. The benefits this woman is receiving makes all of us less free, and she is being given massive preferential treatment.
For those that love the system and think that gaming the system is fine, I hope your house is burned to the ground with you and your family in it. 🙂 Cheers.