Trashing foreclosure homes may be on the rise

Article Courtesy of The Tampa Tribune


Published August 29, 2011


From the outside, the two story house in a quiet Seffner subdivision looks like a good investment. The grass is tall, it needs to be painted, but it's in foreclosure and the bank is willing to offer a discount to a buyer who will take it off their hands.

But the inside is a different story. Someone, perhaps unhappy about losing the home, smashed holes in the walls, scribbled graffiti, piled trash in every room, and ripped out appliances.

The home was offered at auction early this month and someone put down a $4,200 down payment to purchase it, public records show. But no one came back with the balance.

"It looks like someone took revenge," said Nick Davis, a real estate agent with Re-Max Premier Group. "Unfortunately, we're seeing more of this. We've seen cement in the plumbing systems, the air conditioners ripped out from the outside, wiring being removed.

Davis said he's talked to homeowners who view trashing their home on the way out the door as one last way to stick it to the bank. Real estate agents and lenders increasingly report deals falling through because of the condition of homes, left by original owners. While buyers used to be willing to clean up messes in exchange for a good deal, there are so many homes for sale now that buyers don't have to settle.

"They look at these homes and say, "If this is the damage I can see, what else did the homeowner do to this place that I can't see?'" Davis said.

Alex Sanchez of the Florida Banker's Association, said homeowners often blame banks for their foreclosure problem. It's not uncommon, he said, for homeowners to leave behind a mess for the bank.

"It's very sad," he said. "Banks don't want to foreclose; it's not exciting for us, but we have to protect our assets."

Trashing the home definitely hurts the bank's asset, but such destruction can also backfire on the homeowners, Davis said.

For example, Davis said the Seffner home would have sold for around $250,000 during the height of the real estate boom in 2006. In this depressed real estate market, it would sell for about $100,000, if it were in good shape.

Now that it's trashed, though, buyers will want an even bigger discount.

"The home is worth about $75,000 now, and that will make the deficiency judgment against the homeowner even more," Davis said.

When someone loses a home to foreclosure, the bank has the right to sue homeowners even years later to recover the deficiency. That amount is typically the difference between what the bank sales the home for and the loan balance.

Lenders don't always come after homeowners for this deficiency, although many do. In situations where a homeowner trashes the house, banks are much more likely to sue, Davis said. Even if the bank doesn't try to collect the deficiency judgment, he said, they may sue to recover the costs of repairs.

"Some banks do fix up the home to try to sell it," he said. "Others just cut the price."

And cutting the price to account for a trashed-out home also depresses home values in the rest of the neighborhood, Davis said.

Larry McKinnon, spokesman for the Hillsborough County Sheriff's Office cautions homeowners to think twice before taking out the frustrations on the house.

Owners can be charged with vandalism, if the bank decides to press charges, he said. Another problem with foreclosures, he said, is that homeowners often steal from the house. They rip out anything of value, he said, and that could lead to a theft charge.

"Anything that came with the house needs to stay with the house," McKinnon said. "You may think you're getting back at the bank," he said. "But the bank may have the last laugh."