Frustrated Owner Bulldozes Home Ahead Of Foreclosure

[mawilson 2,133]

He'll end up paying regardless. Just because he flattens the asset, doesn't mean he doesn't owe for that asset - he's an idiot.

In the US, you can return the asset to the bank and walk away owing nothing. Google "non-recourse mortgages".

Of course now that the asset is gone, he actually *will* owe the money.

[Ali G. 37]

Just realized this guy was from Ohio. Someone needs to analyze the water there..

Edited February 20, 2010 by Booyah

[Fandango 1,440]

In the US, you can return the asset to the bank and walk away owing nothing. Google "non-recourse mortgages".

That's not entirely true...it depends on the loan and whether the owner lives in a deficiency-judgment state.

This story is incomplete...he owed $160 on the house? Or that was the amount of the lien? If all he owed in total was $160, a) I don't understand why he'd need authorization from the bank to sell it at $170....that alone says the note was bigger than $160....and b ) if the house truly in this mkt was valued at $300, he could have refinanced, taken a 2nd mtg, or taken a HELOC to pay the first.

Either way, sad situation, but razing the house was just stupid.

[mawilson 2,133]

In the US, you can return the asset to the bank and walk away owing nothing. Google "non-recourse mortgages".

That's not entirely true...it depends on the loan and whether the owner lives in a deficiency-judgment state.

True, it depends on the state and the manner of foreclosure (judicial or non-judicial.)

Still, in most states, the bank's sole recourse is the property itself. Even in states that allow banks

to go judicially and pursue a deficiency, it doesn't happen very often, if at all.

[PlatyPius 5]

I see some reading comprehension problems in this thread...

He was not behind on the house. He had not missed a payment.

He owned a carpet business, in which his brother was formerly a partner. For whatever reason, his brother sued him. When his brother sued him, the IRS put a lien on all of his COMMERCIAL property.

The Bank then foreclosed on the commercial property AND *they* decided to turn his house into collateral on his business and foreclose on it, as well. When he tried to pay off the loan on the house to remove it from foreclosure, the Bank said "Nope, sorry. We'll make more money selling it."

So, to recap:

1. Brother sues him for something related to the business.

2. Court battle for 10 years.

3. IRS puts a lien on his COMMERCIAL property.

4. Bank adds the house to it and forecloses on all of it.

5. Dude gets pissed and bulldozes house.

I can't blame him. The house was unrelated to the issue with his brother, and was in "current" status.

HappyBunny is the only Real Estate person I know on here, so we'll ask her:

Does a Bank's interests outrank an IRS interest in a property?

I'm betting it does, and that the bank foreclosed as soon as it found out about the IRS lien on his commercial properties. Since the bank "knew" it would lose money on the businesses, it added the house to it to make sure they got some profit.

Dude has no properties left. I'd probably say "f##k it!" at that point too.

[Fandango 1,440]

True, Platy, it's not about being behind on a mtg....but a lien is a lien is a lien. The story is crazy incomplete, and from what we've been told, there's not enough info to know what really went on.

I'm guessing at some point, he put the house up for collateral for the biz. I'm no real estate or tax atty, so I'm going to have to say 'I don't know' as far as what lien takes priority.

But the thing is, if all he owed the bank was $160, and he offered them $170 and they refused, there's a lot more money owed than just the $160. As a layperson, I can't see how if offering $10 OVER what is owed is not 'allowed'....something is missing from this story.