Trash the kitchen? – Piggington's Econo-Almanac

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June 30, 2009 at 3:02 AM #15959

MMrenter
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I loved the last thread about a famed columnist giving rotten advice and the moral dilemma of intentionally defaulting without hardship, so let me up the ante with a recent conversation with a friend that anecdotally seems telling about the shadow inventory we love to discuss:

Like everyone who bought in the last several years, my friend is upside down. They’ve lost 50% of their home value, which is now valued at less than 150K. Young family. Kids. Want to move out of bad neighborhood. Got the following advice from a “professional” financial planner:

Stop paying first and second loans and start banking the savings to try to recoup some of your original investment (10% down). After a year, when the bank is getting near ready to kick you out, call the bank and offer to surrender the home in good condition. In return, ask the bank to decrease the hit on your credit from 6 yrs to 4. If the bank refuses, trash the nicely remodeled kitchen and ditch the place anyway.

First part of the plan is well under way. No job loss, no change in situation. Payments were just stopped last October. They have received the NOD, but the only one who even bothers to call is the second loan. Oh, and by the way, the same friend says the maid service that comes every few weeks is well worth the money.

Instead of feeling guilty about the whole thing, my friend was recommending that several others in the same predicament do the same thing. Striking that the primary loan holder doesn’t even seem to care yet.

I know TG is already back on his horse, but does the threat to damage property disturb anyone else? Or is this just cold, rational sound financial advice in negotiating with a soul-less bank?

June 30, 2009 at 8:18 AM #422293

UCGal
Participant

It is one thing to make a cold, calculated gamble that the credit hit is worth the credit hit and underwater-ness.

It is another thing to intentionally trash a house.

At that point – it’s not “their” house anymore – it’s the banks. They’ve stopped paying. Yet they are going to “trash” it. That is vandalism.

I’m with TG on this. What they are doing may be legal. But it isn’t ethical.

June 30, 2009 at 8:18 AM #422522

UCGal
Participant

It is one thing to make a cold, calculated gamble that the credit hit is worth the credit hit and underwater-ness.

It is another thing to intentionally trash a house.

At that point – it’s not “their” house anymore – it’s the banks. They’ve stopped paying. Yet they are going to “trash” it. That is vandalism.

I’m with TG on this. What they are doing may be legal. But it isn’t ethical.

June 30, 2009 at 8:18 AM #422796

UCGal
Participant

It is one thing to make a cold, calculated gamble that the credit hit is worth the credit hit and underwater-ness.

It is another thing to intentionally trash a house.

At that point – it’s not “their” house anymore – it’s the banks. They’ve stopped paying. Yet they are going to “trash” it. That is vandalism.

I’m with TG on this. What they are doing may be legal. But it isn’t ethical.

June 30, 2009 at 8:18 AM #422864

UCGal
Participant

It is one thing to make a cold, calculated gamble that the credit hit is worth the credit hit and underwater-ness.

It is another thing to intentionally trash a house.

At that point – it’s not “their” house anymore – it’s the banks. They’ve stopped paying. Yet they are going to “trash” it. That is vandalism.

I’m with TG on this. What they are doing may be legal. But it isn’t ethical.

June 30, 2009 at 8:18 AM #423026

UCGal
Participant

It is one thing to make a cold, calculated gamble that the credit hit is worth the credit hit and underwater-ness.

It is another thing to intentionally trash a house.

At that point – it’s not “their” house anymore – it’s the banks. They’ve stopped paying. Yet they are going to “trash” it. That is vandalism.

I’m with TG on this. What they are doing may be legal. But it isn’t ethical.

June 30, 2009 at 8:36 AM #422303

SDEngineer
Participant

[quote=UCGal]It is one thing to make a cold, calculated gamble that the credit hit is worth the credit hit and underwater-ness.

It is another thing to intentionally trash a house.

At that point – it’s not “their” house anymore – it’s the banks. They’ve stopped paying. Yet they are going to “trash” it. That is vandalism.

I’m with TG on this. What they are doing may be legal. But it isn’t ethical.[/quote]

Depends on what they mean by “trash the kitchen” as to whether it’s legal or not as well.

Leaving a mess – legal
Selling the fridge/microwave – legal
Removing countertops, cabinets, sink, oven, and other built-ins – NOT legal.

Built-in’s are considered to be part of the value of the house, and thus part of the collateral that the bank has an interest in.

Of course, banks have enough to deal with right now, and I suspect petty vandalism on the part of previous owners ranks pretty low on what they will go after people for, but they could do so (and have done so, even recently), and the law is on their side on this one.

June 30, 2009 at 8:36 AM #422532

SDEngineer
Participant

[quote=UCGal]It is one thing to make a cold, calculated gamble that the credit hit is worth the credit hit and underwater-ness.

It is another thing to intentionally trash a house.

At that point – it’s not “their” house anymore – it’s the banks. They’ve stopped paying. Yet they are going to “trash” it. That is vandalism.

I’m with TG on this. What they are doing may be legal. But it isn’t ethical.[/quote]

Depends on what they mean by “trash the kitchen” as to whether it’s legal or not as well.

Leaving a mess – legal
Selling the fridge/microwave – legal
Removing countertops, cabinets, sink, oven, and other built-ins – NOT legal.

Built-in’s are considered to be part of the value of the house, and thus part of the collateral that the bank has an interest in.

Of course, banks have enough to deal with right now, and I suspect petty vandalism on the part of previous owners ranks pretty low on what they will go after people for, but they could do so (and have done so, even recently), and the law is on their side on this one.

June 30, 2009 at 8:36 AM #422806

SDEngineer
Participant

[quote=UCGal]It is one thing to make a cold, calculated gamble that the credit hit is worth the credit hit and underwater-ness.

It is another thing to intentionally trash a house.

At that point – it’s not “their” house anymore – it’s the banks. They’ve stopped paying. Yet they are going to “trash” it. That is vandalism.

I’m with TG on this. What they are doing may be legal. But it isn’t ethical.[/quote]

Depends on what they mean by “trash the kitchen” as to whether it’s legal or not as well.

Leaving a mess – legal
Selling the fridge/microwave – legal
Removing countertops, cabinets, sink, oven, and other built-ins – NOT legal.

Built-in’s are considered to be part of the value of the house, and thus part of the collateral that the bank has an interest in.

Of course, banks have enough to deal with right now, and I suspect petty vandalism on the part of previous owners ranks pretty low on what they will go after people for, but they could do so (and have done so, even recently), and the law is on their side on this one.

June 30, 2009 at 8:36 AM #422874

SDEngineer
Participant

[quote=UCGal]It is one thing to make a cold, calculated gamble that the credit hit is worth the credit hit and underwater-ness.

It is another thing to intentionally trash a house.

At that point – it’s not “their” house anymore – it’s the banks. They’ve stopped paying. Yet they are going to “trash” it. That is vandalism.

I’m with TG on this. What they are doing may be legal. But it isn’t ethical.[/quote]

Depends on what they mean by “trash the kitchen” as to whether it’s legal or not as well.

Leaving a mess – legal
Selling the fridge/microwave – legal
Removing countertops, cabinets, sink, oven, and other built-ins – NOT legal.

Built-in’s are considered to be part of the value of the house, and thus part of the collateral that the bank has an interest in.

Of course, banks have enough to deal with right now, and I suspect petty vandalism on the part of previous owners ranks pretty low on what they will go after people for, but they could do so (and have done so, even recently), and the law is on their side on this one.

June 30, 2009 at 8:36 AM #423037

SDEngineer
Participant

[quote=UCGal]It is one thing to make a cold, calculated gamble that the credit hit is worth the credit hit and underwater-ness.

It is another thing to intentionally trash a house.

At that point – it’s not “their” house anymore – it’s the banks. They’ve stopped paying. Yet they are going to “trash” it. That is vandalism.

I’m with TG on this. What they are doing may be legal. But it isn’t ethical.[/quote]

Depends on what they mean by “trash the kitchen” as to whether it’s legal or not as well.

Leaving a mess – legal
Selling the fridge/microwave – legal
Removing countertops, cabinets, sink, oven, and other built-ins – NOT legal.

Built-in’s are considered to be part of the value of the house, and thus part of the collateral that the bank has an interest in.

Of course, banks have enough to deal with right now, and I suspect petty vandalism on the part of previous owners ranks pretty low on what they will go after people for, but they could do so (and have done so, even recently), and the law is on their side on this one.

June 30, 2009 at 8:43 AM #422313

UCGal
Participant

What about spraypainting the cabinets and floors. Legal, but not ethical, IMO.

June 30, 2009 at 8:43 AM #422542

UCGal
Participant

What about spraypainting the cabinets and floors. Legal, but not ethical, IMO.

June 30, 2009 at 8:43 AM #422817

UCGal
Participant

What about spraypainting the cabinets and floors. Legal, but not ethical, IMO.

June 30, 2009 at 8:43 AM #422884

UCGal
Participant

What about spraypainting the cabinets and floors. Legal, but not ethical, IMO.
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