Last month I posted a blog about people who, for financial reasons, decided to walk away from their mortgages. Well, Terry Hoskins of Moscow, OH has taken a more extreme approach. He tore his home down to keep the bank from repossessing it. Here is the news brief from Cincinnati’s channel 5.
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I think the title of this article, under the "umbrella" of "stupid acts" may be a bit much...Desperate times call for desperate measures...I would not bulldoze my house, but this guy (who obviously knows how to run a dozer)decided to make a statement. I am certain he knew of the possible repercussions, so I don't think it really falls under the "stupid" category.
Reminds me of my great-grandfather's story.
Way back when - long before all the legal tools lenders now have to protect themselves - he had a nice home in a decent neighborhood (this is the 1930s) that had begun to change in a negative way. He saw the writing on the wall: property values were about to dip significantly in his area and he wanted out . . . fast.
So. . . he mortgaged his house, pocketed the money and walked away, leaving the existing house for the bank to take. The assessed value on the house at the time of his second mortgage, was still very reasonable. And he was right, within a year, property values in that old neighborhood tanked.
Smart move but not exactly ethical. And I'm not so sure folks could get away with that nowadays. ha ha ha
-Ed
There are details missing here that we aren't privy to. I wish the news station had gone into more detail about the 10-year battle over this guy's properties. Banks don't try to repossess homes for no reason, and the IRS doesn't levy a lien without cause. I feel bad for the guy for losing his house, whether it was at the bank's hand or his own, but IMO he did not handle the situation properly.
Great, just what this country needs. Another backwoods me first anti-establishment Posse Comitatus idiot not living up to their tax obligations or financial commitments. The guy clearly is smart enough to wrangle with the bank and IRS for the last ten years and then when he can't meet his obligations he cries foul on a contract and throws a temper tantrum?
Ed, it is still legal.
A Home loan is a Non-Recourse loan, meaning it is secured by the value of an object (the house) and lenders cannot take other assets.
People have been doing essentially the same thing in California.
They also buy a home at current value (1/5 the value of a couple years ago) then let their current home be foreclosed upon, however it is still a net gain to their wealth (E.G nicer home, lower payment etc.).
My wife and I have the credit and the money to do this, but feel it is un-ethical.
Seems like nice people always finish last.
Example: $600,000 in CA currently worth $200,000.
You put down $120,000 which brings your mortgage down to $480,000.
However, now you can buy it for $200,000 if you have good credit and the money.
You put down $40,000 on a $200,000 house (next door to your current house) then only owe $160,000 and let your prior mortgage foreclose.
If you put that same $40,000 into your existing house you still owe $440,000 a far cry from $160,000 if you choose to wreck your credit and your conscience.
Can we get some help for honest people please?
Who knows exactly what the real story is, ten years worth of battles bioled down to a two minute news clip is hardly informative. But, I'm sure without a doubt that there is a clause written somewhere within the mortgage agreement with Hoskins Hancock all over it. Protecting the banks investment with specailly worded insurance clauses.
Do not be fooled, the bank and IRS will get their due no matter what happens and for how long it takes.
You do not own your home, you do not own the land that it is on.................
I know guys like this; guys who implode rather than face their own problems. Blame the banks, the government, anyone but themselves. I'm sure he never tried to be reasonable with the bank or IRS, probably has a gun and has on several occasion threatened to use it on anyone planning to "take what's his" when in fact it is not his.
Which make me think....how can this even be legal? Seems like he just went from being a jerk with credit problems to being a felon. I hope this jerk goes to prison.
On the other hand, walking away from a mortgage is more "ethical" than most may think. Consider, you and the bank are in it together. Would they walk away from you if it was in their favor? Of course they would. And, if you walk, it's not like they get nothing. They get a house and property...exactly what they agreed to receive if you decide not to pay.
As an example, I entered into a home equity mortgage on my home to make major upgrades. Halfway through construction, the bank decided it wanted out and closed my account (I never missed a payment and usually make double payments). That's the bank walking away; no ethical considerations there, even though they know that they leave me in an unfinished house.