patrick.net

investor90 says

For those of us who OWN our properties debt free....we can always place the house on our FSBO market using the internet to PUMP DOWN the prices. Sell the house to a spouse or other trusted family member...especially with a different last name. Give it a go with at least a 60 Days "on market". You than "accept an offer from yourself at a MUCH lower price....down down down she goes.

I love it! But I can't see any owner doing that, because they don't have a motive. Unless they want to buy something nearby for much less...

corntrollio says

As to your other points about college, I think I'm okay with college as two constructs, even though it sounds like you're not:
1) something vocational that gives you job skills (e.g. engineering/sciences, often)
2) something smart and motivated people use to differentiate themselves from sheeple (e.g. someone who goes to be intellectually challenged, to be around other thinkers, to be around more people who are different but are similarly motivated)

Education that provides more job skills is certainly very usefull and would motivate students far greater. Unforturately the educational institutions have shifted to make a more well rounded citizen than a useful economic contributor to our nation. I seriously disliked the elective courses that had no bearing on my career. All it did was suck out more money, time and effort which could have gone elsewhere.

corntrollio says

Because the owners are squatting for years at a time and not paying taxes.

Nah, that can't be it. If you tried live in your house w/o paying property taxes, the local government would gladly seize your house and auction it off. They'll get all the taxes, plus "court expenses" or, more honestly, pure profit.

corntrollio says

That's not universally true, and the statistics don't agree with you. In fact, only a small percentage of the class gets in on a legacy basis.

I'm not disagreeing with you, but your missing the point. It doesn't matter what the percentage is. The fact that there are high-profile instances of that happening is enough to make me doubt a Harvard degree regardless of what percentages are earned.

It's like Wikipedia. Some of the articles may be honest and accurate, but there are enough articles that are either ridiculously inaccurate or subtly controlled by parties with selfish interests that the only way to tell which articles are crap and which are not is to do your own research about the subject matter. And that defeats the entire purpose of using Wikipedia. You might as well ignore whatever Wikipedia says and do your own research anyway.

Same thing with Harvard degrees. Since I can't tell who got in due to connections and who didn't, I have to completely ignore the degree and do my own research anyway. Hence, the degree from Harvard means nothing to me. If anything, it's a red flag. Sorry, but that's the price a university pays for selling its academic integrity. No integrity means no trust.

corntrollio says

You can't judge a school on one graduate.

True, but G.W. Bush is hardly the sole example. And I can judge a school by its repeated actions. You can tell the real values of a person or an institute, not by their words, but by their actions.

corntrollio says

Just look at average SAT scores

Oh, don't get me started on the SATs. They are the biggest crock of shit in academia. You see, the SATs are mostly controlled by liberal arts professors, not mathematics, science, or engineering professors. This makes them extremely biased in favor of liberal arts rather than math, science, and engineering.

Quite frankly, the math part of the SATs is a sad joke. If the math SATs were made to truly test math knowledge, then the people interested in liberal arts majors who score way the fuck lower in total SAT scores than those interested in science and engineering majors.

You see, the math/sci/eng nerds would still score high or at least well on the verbal portion, but all the future liberal art students would get the lowest possible scores on the math portion. In fact, the SATs are designed to make sure the liberal arts students score as well in combine scores as the math/sci/eng students. The only way to do that is to dumb down the math part.

Oh, and it gets so much worse when you go to graduate school. You see, although math/sci/eng students are forced to take lame ass liberal arts classes in college, the reverse isn't true for liberal arts majors. So when most liberal arts majors apply for graduate school, the last time they had a math class was in high school and they don't even remember simple algebra.

So, the GMAT, the graduate school's equivalent of the SATs, has a verbal section that is more advanced than the SATs, but a math section that is even more dumb down and rudimentary.

Not to mention that the verbal sections of the GMAT and SATs are way biased for liberal arts language, which quite frankly is less important than engineering language. For example, the SATs loves the word cacophony. When was the last time you used that word? It means noisy. There's a dozen words in the English language that means noisy. How much value does another add?

But here are some far more useful words that NEVER appear in the SATs: quark, hyperbolic, recursive, relational, covariance, contravariance, normalize, determinant, isothermal, isomorphic, isochoric, isobaric, adiabatic, isentropic, coenocytic, dikaryotic, dipolor, homopolar, boson, lepton. Every single one of these words is unique. There is NO other word in the English language that has the same meaning as any of the above words, yet none of them ever appears on the SATs even though cacophony, one of many words that means noisy, is often in the SATs.

Why? Because if the verbal section of the SATs contained as many words from science and engineering articles as from liberal arts article, then the liberal arts students would have LOWER verbal scores than the math/sci/eng students. And that would embarrass all the liberal arts professors.

To summarize, the SATs suck ass. Oh, and before some smart ass tries to claim I'm saying this because I got a low SAT score, mine was a respectable 760 math, 610 verbal, 1370 combined. And this was before they dumbed-down the SATs even more in the mid/late 1990s. I have no problem criticizing a test that says I'm smart, because if the test sucks, it sucks.

corntrollio says

This is bullshit. MIT and CalTech are just as likely to let legacy kids in as Harvard and Yale. This misperception just sounds like Ivy-hate from people who don't know better

Ok, you are completely wrong about this. Math, science, and engineering nerds don't form "old boy's clubs" the way that ivy league schools do. Have you ever hung out with MIT nerds? I have since my brother graduated from that school. There's a lot of shit you can say about MIT students. References to the Revenge of the Nerds movies would actually be accurate. But to say that the MIT nerds establish dynasties like Harvard graduates? I'm sorry, but that's ridiculous.

The thing about being a nerd, is that it really is all merit based. Yes, they have a lot of goofy criteria for what constitutes a good nerd, but it's an even playing field. Your last name means nothing in the science lab. Who your dad was is null to the hackers. Trust me on this one. If you ever went to a bachelor's party for an MIT graduate, you would not compare them to Harvard graduates. Imagine storm troopers instead of strippers. And sadly, I'm not kidding about that.

MCMSinger says

Elementary, middle and high school are not their to teach you anymore. They are there to condition you to go to college where your position in society will be formed.

My impression is that most elementary and high schools are daycare centers meant to keep children and teenagers off the streets while their parents are working. Teaching the kids anything is secondary to containing them. There are, of course, some private schools that are really about learning. The thing about those is that they can choose to only accept students who want to learn, which I think is a minority.

MCMSinger says

Colleges are all the same for the most part when it comes to it's merits. That's the scam.

I agree. Calculus at MIT is no different than calculus at a community college and is no different than just learning calculus own your own using the Internet. With few exceptions like becoming a doctor, there is nothing that college can teach you that Google can't.

Unfortunately -- or fortunately according to some people -- you can't download a cadaver or fissionable material from Google. So with those few exceptions where you can't get hands on experience w/o college, Google trumps college. As such, getting a bachelor's degree should cost under a $100 excluding your computer which you probably have already. The $100 is for the electricity you use.

Being an illiterate moron does make GWB more American! That was exactly his biggest political selling point.

Unfortunately, I cannot disagree with you. The typical American voter is just as illiterate, including math and science literacy, and does not want his president to be smarter than he is.

Meanwhile, I'm the opposite. Here I am, brain the size of a planet, and I still want my president to be smarter and wiser than I am. Sorry, I slipped into Marvin mode there for a second. The point is, the president should be a smart person, especially today when the world is more complicated and interconnected than it has ever been.

Dan8267 says

Nah, that can't be it. If you tried live in your house w/o paying property taxes, the local government would gladly seize your house and auction it off. They'll get all the taxes, plus "court expenses" or, more honestly, pure profit.

Okay, what is a better explanation? That homeowners aren't paying property tax (as I said) or that banks aren't paying it (as you said)? ALso factor in that you seem to know very little about foreclosure, as evidenced by our prior thread.

Usually, when you have a mortgage, the bank will collect property tax every month as part of your mortgage and put it in an escrow/trust account and then pay the property tax directly. They do this to protect their security interest -- their loan is subordinate to a tax lien. If you aren't paying the mortgage, then the bank isn't collecting anything, and it has to come out of the bank's end. After foreclosure, obviously it still comes out of the bank's end. In either case, the government could foreclose, but often doesn't, at least not in a timely fashion.

Dan8267 says

Oh, don't get me started on the SATs. They are the biggest crock of shit in academia. You see, the SATs are mostly controlled by liberal arts professors, not mathematics, science, or engineering professors. This makes them extremely biased in favor of liberal arts rather than math, science, and engineering.

What is your evidence of this? I've always felt the verbal portion is as dumbed down as the math portion.

Also, don't forget about the SAT IIs, which are more advanced (the math actually goes beyond middle school!).

Dan8267 says

Oh, and it gets so much worse when you go to graduate school. You see, although math/sci/eng students are forced to take lame ass liberal arts classes in college, the reverse isn't true for liberal arts majors.

Actually, at many schools, such as Yale, liberal arts majors are required to take some science classes, and not all of them can be Physics for Poets. This is true at many schools, including some state schools, if I remember correctly.

Dan8267 says

For example, the SATs loves the word cacophony. When was the last time you used that word? It means noisy.

It actually doesn't, because it's a noun. :p

Dan8267 says

Trust me on this one.

Thanks, but I think I'll take my own experience with such things and believe that in addition to your anecdote. :) You're seriously talking about the Ivy League in the 60s, with no Jews and no minorities. You watch too many movies. I had a bunch of MIT co-workers, and they had their own culture, sure, but it's just as aristocratic about nerd-dom. The funniest thing was when I asked them about a particular frat at MIT, and there was a pause. After some prodding, my co-workers said, "oh, well that was the dork frat." Hah! I had friends who were in Random Hall with the bathroom stalls and laundry machines that were wired to the Internet, so you could check if they were empty.

The "dynasties" comment is outdated, mostly stated by people who couldn't get in to one of these schools. It's actually hilarious to me that people think these people are so elite -- some of my Harvard/Yale friends are the ones who are down to earth and tended to be the down to earth people for graduate degrees too. Very few people care who your dad is (or mom, these days, actually) these days, and everyone else tries to avoid those people who think it's a thing.

As I mentioned, there are stats on the number of legacies that get in, and it's far lower than it used to be, because the criteria to get in are much more stringent than they used to be. You can't let in dumb legacy kids because the rest of the class is too qualified, and you can't justify it. Let's not forget that Dubya went there before there women were integrated into campus.

Dan8267 says

Calculus at MIT is no different than calculus at a community college

If you're taking calculus (single variable, anyway) at MIT, you're either a humanities major or in remedial math. :p

GWB talked like one of them, though he's about as opposite as you can get, being from patrician east coast Ivy League stock, the son of a president, and very rich.

Oliver Stone's movie W pretty much summed up that point. W lost an election in Texas and said something like -- and I'm paraphrasing here because I don't remember the exact words -- "I will never be out-Jesus'd or out-Texan'd again!" Although that movie altered a lot of facts and stories, it nailed the essence of Bush. In a way it's like Bush's Braveheart, historically loose but essentially correct.

Of course now they are deep in the shit because of Bush, probably unemployed, no medical care, foreclosed on, but they sure showed us college boys not to tell the working class who to vote for.

I guess that explains quite a few things. We shouldn't have told them not to fuck their first cousins either.

Maybe we should launch a "rock the vote" campaign in the south. Tell them all to vote because we liberal know-it-alls have determined that they should do so.

thomas.wong1986 says

Unforturately the educational institutions have shifted to make a more well rounded citizen than a useful economic contributor to our nation.

If that was the intent of colleges, then they have failed miserably. All you have to do is look at all the comments on patrick.net to see that people are divided into camps, particularly left vs right, which means that people in our country are generally not well-rounded. Unless, of course, by well-rounded, you mean physically. In which case, Americans are definitely well-rounded.

corntrollio says

Okay, what is a better explanation?

OK, I've done a little bit of research on this now, but not much. It appears to vary from state to state. In an example from Rhode Island there appears to be a bill from January 2009 that would require banks to pay property taxes it. I don't know if this bill has passed, but it does show that banks had not been paying the property taxes -- perhaps the taxes were passed on to whomever bought the property.

corntrollio says

What is your evidence of this?

You mean, what is my evidence that the SATs are a crock? What exactly would constitute evidence? How exactly does one prove that something is "shit"? I mean, that Transformers movie by Michael Bay was pretty much shit, but how do I prove that? Seems like a Zen question to me. What is the sound of one turd plopping?

Weren't my examples convincing enough? If not, I don't think I could convince you.

corntrollio says

It actually doesn't, because it's a noun. :p

Syntax doesn't change the meaning of the word. Context could, but not syntax.

corntrollio says

bathroom stalls and laundry machines that were wired to the Internet,

Yeah, for some reason MIT students are obsessed with wiring everything to the Internet even when it serves little to no purpose. How often does the soda vending machine run out of orange flavor soda? I guess its a culture thing.

corntrollio says

Let's not forget that Dubya went there before there women were integrated into campus.

That's true, but it takes a much longer time to repair a reputation than it does to destroy one.

Again, I'm not saying that most Harvard students don't deserve their degrees. I'm saying that I can't trust a degree just because it is from Harvard. Granted, that's true for most colleges, but more so for some colleges than others. And the only thing that can restore Harvard's image in my mind is if it goes through a century of not letting anyone like GW Bush in. And that's going to take some time.

corntrollio says

If you're taking calculus (single variable, anyway) at MIT, you're either a humanities major or in remedial math.

True. My point was that calculus is the same no matter where you learn it. So when you go to college at a place like MIT, you're really paying to have classmates who are as smart as you. It's the students that make the college and not vice versa.

Personally, I don't see much point in college as a learning vehicle. It's too corrupted by money since colleges are just corporations. The Internet renders college obsolete as a learning vehicle for almost every subject. Notable exceptions being things you cannot legally do outside of a regulated profession like medical school. Although I have played doctor in the past and my patients were quite satisfied.

Dan8267 says

OK, I've done a little bit of research on this now, but not much. [...] Rhode Island there appears to be a bill from January 2009 that would require banks to pay property taxes it.

... wow. I'm not sure how to respond without coming across as being insulting, but since we're both in Florida I can tell you this: Banks pay property taxes. Even in the State of Rhode Island and Providence Plantations.

Here's how it works: if you don't pay your taxes the city files a tax lien against the property. Tax liens, if unpaid for some amount of time, go to auction. Winning investors buy the lien by paying off the taxes. The problem is the time between when the city wants to get paid and when the investor buys the lien, which varies by jurisdiction.

Now, if we read the article you linked to, paragraph 4 (of 11) says, almost in its entirety: Representative Carnevale has introduced legislation to require “a bank or other mortgagee commencing a foreclosure process to pay the city or town the outstanding property taxes on or before publishing the first foreclosure notice.”

That means that the legislation requires a bank or other mortgagee to pay the city or town the outstanding property taxes before publishing the first foreclosure notice.

Even though the city lien takes precedence over the bank's, it has no incentive to pay anything until someone can foreclose on the bank with the superior lien. In Florida, you have to hold a lien at least two years before you can foreclose on the bank. So if the bank forecloses and goes to auction first it doesn't care about that lien - whoever buys the property at auction will pay it off if they want to keep it.

And that doesn't mean that the proposed legislation makes much sense, either. Here, county taxes are due Nov 1 and payable through Mar 31. After that, there is a 3% penalty and Florida statutes state the action must be held prior to Jun 1. So, assuming there's a buyer at the auction, the payment is merely delayed 7 months at most.

Moreover, if the bank publishes the lis pendens on October 30 the taxes are likely all paid up. Rhode Island most likely has different rules and even 7 months' delay is certainly substantial, but it is arguably unfair to treat banks and other sellers differently (though banks do get unfair preferential treatment w.r.t. condo foreclosures) and what recourse does the city have anyway? They're still not getting their money prior to the tax lien auction - banks will just begin foreclosure before the taxes are due.

Dan8267 says

OK, I've done a little bit of research on this now, but not much.

But you're still wrong, and I'm not sure where your misconception comes from -- like cc0 says, it's hard to know how to respond to someone who is so absurdly wrong without having a factual basis. You don't seem to understand either foreclosure or how property tax/tax liens work. The bank is on the hook for property taxes if it owns the property.

You completely misunderstood RI's law -- it requires the bank to pay the accrued property taxes before filing a foreclosure notice. That's completely different. The bank doesn't own the property at that point.

Dan8267 says

You mean, what is my evidence that the SATs are a crock? What exactly would constitute evidence?

No, what is your evidence of this supposed liberal arts conspiracy?

Anyway, it doesn't matter if the SATs are a crock or not to my point -- just look at the student body ex SATs too.

"I have come to not hate the bankers but rather admire them and praise them. They are good in my opinion because they shaft people who deserve to be shafted."

Well, at least you reveal yourself.

This just in.

BBC article on retired / single people hoarding family sized houses: http://www.bbc.co.uk/news/uk-15362474

cc0 says

... wow. I'm not sure how to respond without coming across as being insulting, but since we're both in Florida I can tell you this: Banks pay property taxes.

No insult taken. Your explanation made things quite clearer. As I said, I'm not very knowledgeable about how tax laws regarding real estate works -- something that most people could honestly say -- so my impressions were based on all the news reports about county tax rolls being in trouble from foreclosures.

However, if I understand you correctly, the banks do pay real estate taxes once they sell the foreclosed house under the current system. Now that banks are holding on to properties for years before offloading them, this could be a sizable delay. Correct?

From what you say, I gather that banks can stall payment of taxes for months or years without incurring financial penalties like the common house owner would. If that's true, then I think that is still unjust. So, I'll revise my original statement,

Whoever holds the note should have to pay taxes on real estate.
to
Whoever holds the note should have to pay taxes on real estate on time or face the same penalties as everyone else.

corntrollio says

But you're still wrong, and I'm not sure where your misconception comes from -- like cc0 says, it's hard to know how to respond to someone who is so absurdly wrong without having a factual basis. You don't seem to understand either foreclosure or how property tax/tax liens work. The bank is on the hook for property taxes if it owns the property.

1. Yes, I was wrong.

2. So what? Like I can't be wrong about anything, even things that I preface with "I'm not very knowledgeable about how that works". Sorry, but not even I am perfect, and I have no problem admitting when I made a mistake. But that's not what's important. What's important is how the system actually works, which cc0 clarified nicely.

3. My "misconception" came from news reports stating that city and county government's tax rolls were threatened by all these foreclosures. I thought I stated that several times now. Now the news reports certainly could do a better job at explaining the details, but that's another issue. From those reports, which I'm sure many others have heard, I got the false impression that banks weren't paying any taxes on real estate.

4. cc0 did not say, "it's hard to know how to respond to someone who is so absurdly wrong without having a factual basis". That's your assertion.

5. It's not hard to respond to someone who is "absurdly wrong" w/o having a factual basis. You just present the facts like cc0 did in a clear manner. A rationalist will accept them if they are correct.

6. Since when does getting one detail about tax law wrong constitute being "absurdly wrong". Seriously, do you know every single fact about tax law? Christ, I've got detailed knowledge of everything from quantum mechanics to neural networks to web service architecture in my brain. I can only be an expert on so many subjects. Excuse me for not spending thousands of hours becoming a subject expert on tax law like I have with the other subjects I just mentioned. It takes considerable time and effort to become an expert on anything, and time is a very limited resource.

7. " You don't seem to understand either foreclosure or how property tax/tax liens work." Not completely, and without studying the subject matter in great detail, say by taking an online course from a college, I still won't. Many of such online courses are free nowadays, but they still take a lot of free time, so I don't plan on becoming an expert on tax law. Sure, such knowledge would be nice, but I'd rather pursue other, more knowledge that is more important to me.

8. Most important of all, corntrollio, you just don't get that I don't mind being wrong. You see, when someone shows me that I'm wrong, I listen and learn. And that's a good thing. Once I learn something, I adjust my world view to incorporate the new understanding. For example, I revised my original statement in my previous post. Being shown to be wrong, when I actually am, is a welcomed experience.

I just don't like b.s. arguments and ones that are either logically flawed or deliberately factually incorrect. It's ok to get a fact wrong. It's not ok to cling to that falsehood like Fox news does.

So you see, corntrollio, I was wrong, but I'm not wrong anymore because I've accepted cc0's correction. That's the thing about being rational. Being wrong is a very short-lived state. So I hope you thoroughly enjoyed the brief time that I was wrong about something, as it is likely not to happen again for quite a while.

Personally, I am more interested in what is the truth than who is right or wrong. That's more important.

P.S. Anyone, please feel free to "crap" on my comment above. And buy lots of those points from Patrick.

Dan8267 says

Personally, I am more interested in what is the truth than who is right or wrong.

Then maybe you would have listened the first time. You got multiple explanations from me while trying to cling to your original misconception. Maybe it would have been slightly more polite to add, as cc0 did: "I'm not sure how to respond without coming across as being insulting", but I wasn't trying to be insulting -- just direct because you acted like you had knowledge about these subjects. Here's the first response, to which you had no satisfactory answer:

corntrollio says

Banks do have to pay taxes on foreclosed houses. They put it on their balance sheet as REO -- real estate owned. Why would they be able to dodge property tax?

The second, which gave the explanation for why cities and counties were starved of tax:
corntrollio says

Because the owners are squatting for years at a time and not paying taxes.

The third, which explained how property tax is typically paid on mortgage properties and how tax liens work:
corntrollio says

Usually, when you have a mortgage, the bank will collect property tax every month as part of your mortgage and put it in an escrow/trust account and then pay the property tax directly. They do this to protect their security interest -- their loan is subordinate to a tax lien. If you aren't paying the mortgage, then the bank isn't collecting anything, and it has to come out of the bank's end. After foreclosure, obviously it still comes out of the bank's end. In either case, the government could foreclose, but often doesn't, at least not in a timely fashion.

If after three explanations, you still cling to your incorrect misconception, and I tell you directly that it's a misconception without resorting to "you're stupid" or "you're a moron, this is how it works," I don't really see the problem. I don't mind being wrong either, but usually I at least try to listen to people who are giving answers and ask appropriate questions if I think they're bullshitting me instead of repeatedly saying "nuh-uh".

Dan8267 says

However, if I understand you correctly, the banks do pay real estate taxes once they sell the foreclosed house under the current system. Now that banks are holding on to properties for years before offloading them, this could be a sizable delay.

Well, when property tax is not paid, a lien can be placed on the property. This lien would be superior to any lien (i.e. mortgage) the bankster would have. So while the mortgage is still alive, the bank has a strong incentive to pay the property taxes to avoid an auction. Ordinarily, your incentive to pay property tax when you own a property is not to lose it to foreclosure/tax auction. However, after foreclosure, typically the bank wants to sell the property, so they might not care about paying taxes post-foreclosure because if the property gets sold, it might be good for them, although they're probably still better off paying the taxes so a market-buyer (as opposed to an auction-buyer) can get good title. Maybe they can rig the system by paying it off just before the sale.

Nonetheless, most of the accrued taxes were likely under the previous owner, not the bankster. These taxes are getting deferred for years at a time by the deadbeat owners, not the bankster.

Dan8267 says

Whoever holds the note should have to pay taxes on real estate.
to
Whoever holds the note should have to pay taxes on real estate on time or face the same penalties as everyone else.

Why "[who] holds the note"? That seems like the wrong phrasing. The bank holds the note -- i.e. the promissory note that is secured on the property. The owner gives the note to the bank and gets it back when the note is paid off. I think you mean either "mortgagor or owner" or maybe "whoever holds the deed".

Dan8267 says

However, if I understand you correctly, the banks do pay real estate taxes once they sell the foreclosed house under the current system. Now that banks are holding on to properties for years before offloading them, this could be a sizable delay. Correct?

Not correct. Let me be very clear about something upfront: I am not a real estate lawyer nor do I claim to be. I've dabbled in some real estates ventures and have learned what I've learned.

Now, in Florida, banks do have some preferential treatment, and other states may also have bank exceptions. But as an example, let's say you wanted to buy a condo at foreclosure.

If you win the auction and gain title to the property, the first thing you need to do is pay off any superior liens (IRS, city, water, etc.) and all the unpaid back taxes. It doesn't matter if you are you or if you are a bank - if you don't do this you're just going to get foreclosed on, and a bank isn't going to lose their $80,000 house because of $2,000 in taxes.

If the property is a condo or has an HOA though, you also have to pay all of the back owed fees. For a condo or HOA charging $300/mo this can be quite significant given that, on average, uncontested foreclosures take about 2 years to go to auction.

Now, at auction, few properties actually get sold. Most of the people don't bid enough and the bank takes the title. All the same rules apply to the bank with one exception: the bank only has to pay back 6 month's worth of condo or HOA fees. But from that point forward the bank is the condo owner just like any other.

So one of the tricks the banks pull is that they start the foreclosure process, but the day of the auction they call up the clerk of court and tell them to cancel the sale. The original owner is long gone but still has the title, which means that all the debt is accruing in their name. The HOA/condo association meanwhile is getting no income and until the bank takes possession there's nothing they can do but raise rates on everyone else.

This is why if you ever go through foreclosure, stay in the house until the Sheriff shows up to remove you. It doesn't matter if your place is sold at auction - make the new owner evict you.

From what you say, I gather that banks can stall payment of taxes for months or years without incurring financial penalties like the common house owner would. If that's true, then I think that is still unjust. So, I'll revise my original statement,

They can stall payment in the hopes that they can sell the property first, but I'm pretty sure the new buyer is going to insist on a clear title. A cash buyer may have more money than sense, but anyone getting a mortgage will have a bank who insists on it.

So even then the bank isn't going to be able to get away with not paying, and interest and fees are going to accrue as they normally would. Again, this is here in Florida. In places like Detroit, on the other hand, the bank may go ahead and let the city foreclose. Then the city gets no revenue along with the liability of owning a run down shitbox.

cc0 says

All the same rules apply to the bank with one exception: the bank only has to pay back 6 month's worth of condo or HOA fees.

I decided to look this up. Turns out that it's changed and the bank* owes the lesser of (a) 12 months back fees, or (b) 1% of the mortgage amount. So if there's $3,600 in back fees on a house with a $200,000 mortgage, the bank only has to pay $2,000.

* Actually, the first mortgage holder doesn't have to be a bank, though it usually is. I can just as easily hold the first mortgage if you're buying from me and we're doing owner financing.

cc0 says

So one of the tricks the banks pull is that they start the foreclosure process, but the day of the auction they call up the clerk of court and tell them to cancel the sale. The original owner is long gone but still has the title, which means that all the debt is accruing in their name.

That sounds like fraud in my opinion.cc0 says

but I'm pretty sure the new buyer is going to insist on a clear title.

I was told by a real estate lawyer that the purpose of the foreclosure process was to ensure that the title is clear and allow the property to be sold without title worries from the buyer. Of course, I don't know whether or not he's right, but he seemed like a competent lawyer.

cc0 says

In places like Detroit, on the other hand, the bank may go ahead and let the city foreclose. Then the city gets no revenue along with the liability of owning a run down shitbox.

Yeah, and the bank probably gets a tax write-off for the property they abandoned. So who's liable if the property falls down from lack of maintenance and someone on the sidewalk gets hurt?

cc0 says

Turns out that it's changed and the bank* owes the lesser of (a) 12 months back fees, or (b) 1% of the mortgage amount.

All these little rules heavily favor the banks and encourage them to take bad risks.

Dan8267 says

That sounds like fraud in my opinion.

Not really - people are just suckers. They left voluntarily. They should have stayed until they were evicted. It's a dick move, which is why most people don't do it. Just like if you stopped paying rent: you could move out any time, but once you've started down that path you might as well follow it to the end.

Dan8267 says

I was told by a real estate lawyer that the purpose of the foreclosure process was to ensure that the title is clear and allow the property to be sold without title worries from the buyer.

I'll assume he was trying to keep things simple, but that's very much untrue. Foreclosure is when you force the courts to sell an asset on which you have a lien in hopes of getting your money back.

If you hold a second mortgage you can foreclose and take the title, but that doesn't wipe out the first mortgage. If you mow someone's lawn and don't think they're going to pay you, you can take out a lien and foreclose.

Dan8267 says

Yeah, and the bank probably gets a tax write-off for the property they abandoned.

Banks don't really have regular accounting, and they can't lose money. See my other posts in this thread for more info.

Dan8267 says

So who's liable if the property falls down from lack of maintenance and someone on the sidewalk gets hurt?

The city, thus my statement that "the city gets [...] the liability".

Dan8267 says

All these little rules heavily favor the banks and encourage them to take bad risks.

Perspective. If I sell my condo to someone owner-financed, why should I be liable if they didn't pay the fees? According to the law, as long as I'm the primary mortgage holder and I sue the association, my liability in that respect is limited.

There are many reasons banks take bad risks, but this hardly qualifies.

Dan8267 says

I was told by a real estate lawyer that the purpose of the foreclosure process was to ensure that the title is clear and allow the property to be sold without title worries from the buyer. Of course, I don't know whether or not he's right, but he seemed like a competent lawyer.

That's not completely correct, as cc0 pointed out. A foreclosure only gives you a clean title as to any junior liens. A senior lien will still remain. A bankster can foreclose on a 2nd mortgage, but in that case, the 1st mortgage would still stand, and the foreclosure sale would sell the property subject to the 1st mortgage. Occasionally this trips up amateur foreclosure buyers who don't realize they are buying a property subject to another mortgage when they are bidding. Tax liens are senior, so even a foreclosure of a 1st mortgage will not wipe it out.

By the way, buying a house subject to a mortgage or by assuming a mortgage was quite common in the past, but is no longer common. For example, if there was a $200K mortgage on a house and it was worth $400K, you could pay the current owner $200K and assume the mortgage. The reason you might want to do this is if the prior owner had a favorable mortgage (e.g. what if the person bought the house in the 60s and then sold it between 1973 and 1982). However, banks have been fully able to exercise due-on-sale clauses for almost 30 years now, since the Garn Act in 1982, so this concept has gone by the wayside.

Dan8267 says

That sounds like fraud in my opinion.

Fraud by whom? The prior owner who ran off?

Dan8267 says

So who's liable if the property falls down from lack of maintenance and someone on the sidewalk gets hurt?

This is almost always the owner, no matter who that is, although it could also be the leasor for a commercial lease, since a commercial lease might allocate maintenance to the leasor. There may be additional lawsuits, e.g. if the owner had contracted a company to fix the sidewalk, and that company didn't fix it, the owner may have a contract claim against the sidewalk-fixing company, but the owner would often still be liable as to the injured person.

cc0 says

Perspective. If I sell my condo to someone owner-financed, why should I be liable if they didn't pay the fees? According to the law, as long as I'm the primary mortgage holder and I sue the association, my liability in that respect is limited.

Yeah, I agree on this one. The bank theoretically has no interest in foreclosure -- they don't want to have properties on their books, because they are illiquid and are liabilities. If you seller-financed something, you would similarly expect to be blame-free here.

Seller-financing isn't as common as it once was, but it is still done in some cases in various types of property markets.

Dan8267 says

cc0 says

So one of the tricks the banks pull is that they start the foreclosure process, but the day of the auction they call up the clerk of court and tell them to cancel the sale. The original owner is long gone but still has the title, which means that all the debt is accruing in their name.

That sounds like fraud in my opinion

To clarify, it sounds like fraud to let the banks cancel the foreclosure sale in order to keep the debt accruing on the former owner who was foreclosed upon. Not that I have a lot of sympathy for fool-buyer who paid to much for a house, but once he's been foreclosed on, his credit should incur more dings.

Dan8267 says

To clarify, it sounds like fraud to let the banks cancel the foreclosure sale in order to keep the debt accruing on the former owner who was foreclosed upon. Not that I have a lot of sympathy for fool-buyer who paid to much for a house, but once he's been foreclosed on, his credit should incur more dings.

Sorry, not sure I understood your comment. Foreclosure would be a bigger hit to your credit than another 30 days late on a payment, wouldn't it?

The former owner, who now thinks he is done with his ordeal, could be held liable for HOA fees and taxes if the property is still technically in his name. Granted, this won't hurt his credit as much as the foreclosure, but it will still make it worse.

Dan8267 says

The former owner, who now thinks he is done with his ordeal, could be held liable for HOA fees and taxes if the property is still technically in his name.

Isn't that the former owner's mistake? He/she should have checked to make sure the foreclosure went through. Until the deed is rightfully held by someone else or there's a bona fide purchaser, it's still your problem.

Dan8267 says

To clarify, it sounds like fraud

It's certainly not fraud in the legal sense - it's just people being dumb (actually, ignorant is a more appropriate word, but most people don't understand words very much, either).

When you buy a house, whose name is on the title? Yours.
When you get a mortgage, whose name in on the title? Yours.
When the bank issues you a notice of foreclosure, whose name is on the title? Yours.
After the court hearing declaring you in default, whose name is on the title? Yours.
At the beginning of the foreclosure sale auction, whose name is on the title? Yours.

It's your place until the sale completes at action. If you leave before then, it's just you being dumb / not recognizing your own rights. Are you accruing debt on your HoA? If you're not paying, then of course you are - it's still your house, whether you think "you're done", or not.

How to accelerate the drop in house prices?

Government simply pays certain amount of money to underwater mortgage home owner if they sell their houses. (Maybe they can limit it to those who
never made profit via selling house in their life. e.g. new home owner).

This will help home seller to pay back the principles home owner would lose
when they sell house with negative equity.

This will make home owners willing to sell at lower price. Buyers will increase.
The house price goes down. And more people buy. -> house price bottoms out.

Of course, I don't know how this will affect mortgage back security and bond
holders. Would it be less damage than foreclosure any way?

Well, it will cost a lot of money but hey we already wasted trillions of dollars
in buying mortgage backed security anyway....

APOCALYPSEFUCK is Tony Manero says

How to accelerate the drop in house prices?

Go to every open house you see listed and take a shit on the stairs.

If I can shit more than twice a day. I already dropped one in the toilet in this morning, and no shit available for that purpose. :-)

I agree with Patrick that house prices should keep falling and that Obama's lame attempts to stop it are foolish. But, he is buying votes here. He will try to buy the underwater soccer mom vote. He will buy the young people with student loan debt vote. He has already bought the unemployed/poor/food stamp vote.
Where I live, the people who bought the bubble were fools who were greedy. Some others were fools who were also lying on their loan apps. Ever heard of Countrywide? I personally know some of these people and I do not pity any of them. They drank the Koolaid and thought they'd be Donald Trump someday. Of course the banks are complicit, as were a whole bunch of clowns on Wall St. A pox on all of them. I would talk to my friends and ask "how long do you think that it can last, the median house price is about 15X the median salary and over 10X what a full professor makes here?" They looked back at me with their idiotic expressions and said "I don't want to miss the boat!"

clambo says

I agree with Patrick that house prices should keep falling and that Obama's lame attempts to stop it are foolish.

So you have no problem with the economy going back into recession and you losing your job?

Preventing a free fall in home prices has less to do with homeowners/keeping home prices high and more to do with the US economy.

Bring the rates to 7% and stop complete government support to banks. Just let the worst fail.

Dan8267 says

Corntrollio, how about we bury the hatchet? I'm sorry for whatever I did to hurt your feelings, but get over it man. Whatever I said that offended you was based on logic and not a personal attack.

What indicates that you hurt my feelings? Because I disagree with you sometimes? I might be more direct about that than some other people here, but that's about it. There's no agenda against you. No hatchet to bury as far as I can tell, but I'm happy to bury one.

If anything, cc0 has been saying the same thing as me. Isn't that noticeable if you read carefully?

Well I think Patrick.netters need to re-think voting for democrats again.

They are the ones heavily supporting all the bailouts/tax payer backed underwater Refis. (just this week another bailout from Obama on the underwater Refi's!!!!!)

Isnt Barack the most dissapointing democrat ever? He even has let the DEA run wild again on the medical mj dispensaries in CA. What the hell kind of democrat is he? He is a big police union democrat.

Vote for him if you are a cop with an underwater mortgage.

Can we assume one way to accelerate house price drops is to vote for republicans? I think yes.

PockyClipsNow says

They are the ones heavily supporting all the bailouts/tax payer backed underwater Refis. (just this week another bailout from Obama on the underwater Refi's!!!!!)

That's not completely true. Both parties have been willing to bail people out, just in different ways. The biggest bailouts have been under Bush thus far. The Democrats can't pass anything to do with bailouts alone because it would just be filibustered like everything else. Does that mean they haven't screwed stuff up here? Absolutely not, but both parties want to buy cheap votes, and these housing bailouts are cheap votes.

This current underwater refi program actually makes sense because it's narrowly tailored to loans that are already government-backed and that are at least 6-months current. If those loans default, it will be more expensive than this program. Some of the other bailout programs have been stupid, I agree, but this one has merits.

PockyClipsNow says

Isnt Barack the most dissapointing democrat ever? He even has let the DEA run wild again on the medical mj dispensaries in CA. What the hell kind of democrat is he? He is a big police union democrat.

This is really overblown. Obama said as a candidate that he would treat doctor-prescribed marijuana as we would treat other doctor-patient relationships. The DEA has been dealing with the gigantic dispensaries that are basically drug traffickers in disguise and don't fit under the policies put in place. The DOJ and DEA have no problem with personal-use and small scale growers, but they've always had a mandate to stop trafficking. This seems entirely consistent as long as you don't ignore the nuance.

PockyClipsNow says

Can we assume one way to accelerate house price drops is to vote for republicans? I think yes.

I'm actually not convinced of that when push comes to shove. But it'd be an interesting experiment. And it'd be the right thing to do -- less government intervention in the housing market would help it stabilize because prices would come down more.

Both Cain and Romney mentioned that foreclosures must be allowed to happen.
Someone above said that without rising house prices, our economy will continue to suck. Really? Check out Switzerland sometime and how many people own expensive houses over there.
I love using Switzerland as an example because since I visited the place I was amazed at how FREE they are and how prosperous too.
Continued efforts to inflate a popped housing bubble will always be pointless and simply delay the inevitable. American suckers: quit CRYING and realize you bought an inflated asset, you gambled and you LOST.
I would like the bank to give me new terms for my Ferrari car loan. I noticed that my car has recently become grossly underwater! If Obama would guarantee the loan, I would dearly love it.
The bonus is that my riding around in the expensive Ferrari helps our economy! Did you not know that? My living in an expensive house helps our economy! Did you not know that? Why, how silly of you if you didn't.
Housing is over, toast, done as an investment. It's a place to live. The price of the roof over your head means nothing to the economy.

clambo says

Someone above said that without rising house prices, our economy will continue to suck. Really? Check out Switzerland sometime and how many people own expensive houses over there.

I'm assuming you are refering to me. I didn't say that at all. I said that rapidly falling housing prices would lead the US back into recession. Slowly falling or relatively stable prices let the economy stumble along as it has for the past couple of years.

Again--nobody wants housing prices to go up 10%/year again. That's a straw man.

The recession will happen or will not happen regardless of the continuing drop in inflated bubble house prices.
If you go look at places like Marina, CA or Seadise CA, note how many are foreclosed. The ratio has been steadily rising for two years.
Whether or not there are jobs for the people who will transform from foreclosed owners into renters is unrelated to house prices.
Keep hoping! You can wait this out if you live to be 105.