AP Article on Foreclosures Gets Me Thinking...

Below is a link to an AP Newswire article saying that foreclosure rates are up 25% year over year for October of 2008 back to October of 2007.  As folks who read this blog know, in a way our real estate practice has benfitted from the spate of short sales and foreclosures but the last two years have been a real eye opener for us as well - on  a lot of levels.

My heart goes out to folks who truly have financial misfortune and find themselves upside down and unable to stay in a home they thought they could afford but that is only one piece of this group of underwater properties.

More and more I am going into homes that were built by speculators and investors, they never lived in the home and they did 100% financing on the home - and now they cannot sell them for the outstanding loan balance and they end up in foreclosure. And here I'll use a specific to describe a general, never a good thing, but we have one where someone, AFTER they tried to sell the home themselves and before the home ends up in the property of the bank, literally REMOVED the KITCHEN from the building. Went in with a sawzall, cut the plumbing back to the wall, took every cabinet, appliance, counter, EVERYTHING. Now I can't say for sure WHO did this but the home shows no sign of forced entry. IF the previous owner did it, exactly how does one square the idea that although the bank financed EVERY dime of the home, if it's headed to foreclosure and the bank is going to lose 100's of thousands ANYWAY, then this person can in good conscience take a 50 to 60 thousand dollar kitchen with them as well??

We see it all the time, people are mad at the bank and destroy the home as they are leaving. SOOOO they leave all their NEIGHBORS with an eyesore that cannot be sold and when it does it severely depreciates values all around them and somehow they "punish" the "Bad Ol Bank" for loaning them money they probably shouldn't have borrowed to begin with!  I guess I don't understand that logic at all.

I am no advocate for banks who made loans to people who had no business borrowing more than they can afford but conversely I feel if the bank financed the home, all of it, then if you give it back to them you should give it back, INTACT.

What do you think?

http://www.floridarealtors.org/NewsAndEvents/n2-111308.cfm

- Mike W.