Posted by Kristine-CA on July 27, 2007 at 09:28:37:
I find it interesting that so few people know what their obligations are
per a deed of trust/mtg and promissory note. Lots of assumptions and
not a lot of facts milling around.
You may want to read a deed of trust or mortgage doc to see what it
has to say about waste. Fixtures do belong to the collateral, the lender
does have an interest in them. Most deeds of trust state that
committing waste is a default. So even if you are making your
payments on time a lender can foreclose on you for committing waste.
Not that this will happen and not that the original poster will run into
any problems from the lender. I agree with JT in that is is unlikely the
lender will take action after a foreclosure for waste, vandalism or theft.
It gets complicated because the lender would have to make a case that
the borrower committed these acts and not someone else. Obviously
the time and money to do this is not usually cost effective for the
lender with a non-performing asset on their hands.
All that being said, I’ve seen cases where the lender has gone after for
the borrower for waste. A private lender with an axe to grind,
especially one who knows that the borrower has other assets. You can
bet they will hire an attorney to get a judgement after a foreclosure.
I have lost my house to foreclosure and the sheriff sale is in five weeks. However, I have found another house to move my family into that I can buy on a land contract that is a slight fixer.
I would like to take some things with me from my current house to my new house, such as some doors, carpet, ceiling fans, gutters, fuse box, and the central air unit. My dad is worried and is asking me to get some advice before I do all this.
Does anyone know if there is anything illegal about me taking these things before the sheriff sale? It’s still my house and my stuff until the sale, right?
Posted by Real Dan on August 03, 2007 at 06:21:43:
Morals aside, by removing the property may be devalued. And if the sale of the property either at the Sheriff Sale or as a REO is for less than the amount owed, then there would likely a deficeincy judgement. Possibly the judgement would be higher if the property is stripped.
The lender can come after you for the deficiency, but if you have nothing, there will be nothing for them to get. If that’s the case they will probably try to collect, maybe turn over to a collection agency and at some time maybe write it off. It would probably go on your credit report.
One other note is that if the mortgage is a FHA/VA or other government backed loan like farm home, then the government never writes off the debt and will deduct it from ANY payment yuo ever get from the government including tax refunds, social security, retirement, etc. The government and their computers never forget or forgive.
Dan;
You certainly opened “Pandora’s Box” and got lots of people nervous and excited. I do not propose to tell you what to do or how to do it. I can however give you what the courts look at as the “Law of Fixtures” …What you do with this informatin is up to you.
Landlords, Tenants, Buyers, Sellers, Agents and FIXTURES!
From time to time I am asked, “What is a fixture, is this a fixture”? I am not an attorney and
do not give legal advice. Good common sense and a look at what is called the law of fixtures
should enable you to determine if it “is” or “is not” a fixture and whether it is included or excluded
in a real estate transaction. Generally when personal property items are bolted, nailed, screwed,
cemented, plastered, etc., or built into the structure or attached to the land it becomes a fixture,
unless it is specifically excluded. The law of fixtures calls out five basic tests to determine if it is a
fixture:
The Method of attachment. If it permanently attached and cannot be removed without
damaging the building, it is a fixture. Example, a television set can be unplugged and removed
but a roof-top antenna that is bolted or screwed to the roof is included in the sale.
Adaptability for use with the property. When an item is specially built into the structure,
such as a dishwasher or stove, it becomes a fixture. Likewise a portable dishwasher or free
standing range is not.
Intention of the parties. What is the intent of the parties involved. If in a sale, the seller
specifically states, “This dining room chandelier is not included.” and this information is made
known to the buyer before an offer is made, even though it is permanently attached and would be
considered a fixture, it is not included in the sale.
Agreement of the parties. Most real estate contracts spell out what is included and the parties
can agree to this list. Even though some may not be fixtures they are included in the sales price
and sale.
Relationship of the parties. If the four tests above fail and it goes to litigation and court,
generally the courts will favor (a) buyer over seller, (b) tenant over landlord, and (c) lender over
borrower.
Exceptions to the rules. Exceptions to these rules apply to business and trade fixtures and the
owner is allowed to remove business or trade equipment which was permanently attached and the
property (building) is restored to its previous condition.
DISCLAIMER: Use Common Sense: This is not intended to be legal advice and you are
cautioned not to rely upon it as such. For legal advice, consult a real estate attorney.
PLEASE notice Item 5(C)…courts will favor “Lender over Borrower”…that being said…you do what you feel comfortable with.
Let see, if your car is just a couple of days away from repo and you take it down to a chop shop, sell all the innerds, leaving only the frame to be repossessed – would this be theft?
I hope Mama taught you better as to right and wrong.
Posted by gerald(tx) on July 27, 2007 at 10:15:59:
If it’s like mine, it lists collateral as “including all fixtures and appurtences therein.” I think this is pretty clear it would be theft.
Now whether they track you down and collect? A lot would depend on your state laws, whether you are employed in sight for a judgement, garnishment, or possibly arrest. If you go underground or move to another state or change your identity, etc.
This is a joke right? I can see the motivation for taking a few doors, ceiling fixtures, and carpet (if it is really expensive), but only a fool would consider taking the gutters and fuse box.
You can get in big trouble doing what you are thinking. It may be your
house, but the lender has an interest in it, and your taking those things
devalues the house and commits waste and damage to the house.
Your taking those things lowers the value of the house, and the whole
reason the lender is foreclosing is because they are trying to recoup
their money, so what you take has to be replaced new by the lender,
and they have the legal right to come after you for it. In some cases I
have seen them charge the lender with fraud and vandalism. When you
signed your mortgage papers, you agreed not to commit any waste or
damage to the property, so they definitely have the right to pursue
legal action against you.
Now, will they, probably not, but they could and it will put a bad mark
on you for getting loans in the future as well. Not to mention, it’s a
really low thing to do. The lender didn’t do anything wrong, you are
the one who didn’t pay your mortgage. Bite the bullet, be a man and
have some honor and integrity.
I’m not an attorney either and don’t know what state your in, but I would say no, it is not legal. However, there are probably not many prosecutions for such activities from banks and mortgage companies that are hundreds of miles away. The sad thing about it, is that it is almost expected.
What you are asking on a smaller scale is,
would it be OK to take off the siding, remove the roof shingles and trusses, tear down the framing and go rebuild on another lot using the materials from your house.
The problem is it is not your house even before foreclosure. You only own the percentage of your equity and the bank owns the percentage of their loan to value. When you default, the bank gets your equity (light fixtures and all) based on the terms of the loan agreement.
Re: Can I legally take this stuff? - Posted by michaela-CA
Posted by michaela-CA on July 26, 2007 at 18:47:10:
Dan,
I would think it’s just like a sale of the house: You can take what’s not attached. All the things you listed are attached. Technically, they should stay with the house.
Contractually the borrower has agreed to protect and maintain the property, according to the mtg (or DofT) docs… They have also promised to make the payments too. By not doing either one the borrower violates the terms of the mtg agreement, and the lenders remedy is to accelerate the mtg… also possibly, depending on state law, obtain a def judgment too.
The biggest risk is IF the borrower allowed the insurance to lapse and the lender put forced placed ins on the property, and later made a claim to the ins co for damages, the ins co would pay the lender… then come after the borrower for recovery of damages. That is the biggest potential problem…
A close second in problems is that IF the borrower would later attempt to file a chapter 7 BK, the lender could fight the discharge of the debt, due to purposefully devaluing the lenders secured interest in the asset, and could likely win that one. I have just read that in a Bk file, recently. It was a new one on me, but a potential risk, all the same.
Maybe… technically, but legally? Do you know if there is anything illegal about taking these things? I know you’re not an attorney, but I appreciate your input!
Come on, are you serious? If a homeowner strips the property the way he is describing, you are telling me that he could not be liable? I have seen lenders go after homeowners in matters like this, and press criminal felony charges for destruction of property. Read the mortgage docs carefully, that property is the lenders collateral, their security for the loan. They don’t often pursue the matter, but to say on here that it is no big deal, is doing a great disservice to all who read it and will follow your advice … and potentially end up in trouble.
His actions cause the lender harm, it can be a very big deal. Let’s please be careful about how we advise newbies on what can or cannot be done. Moreover, let’s not be telling them that it’s “ok” to strip and destroy your property if you go into foreclosure, and have a whole new lot of unscrupulous investors out there. This business is full of enough unsavory people, let’s not promote more.
Newbies listen to what we experienced investors have to say. Develop integrity and character, not promote deceitfulness and dishonesty. They listen.
Re: Can I legally take this stuff? - Posted by Kevin - WA
Posted by Kevin - WA on July 26, 2007 at 21:04:05:
I am not a lawyer, but I watched nearly every episode of LA Law in the late 80’s.
It is my professional opinion that you can take it. It is your house. Like Michaela said, ‘it is like a sale - you can take things that are not attached.’ In the case of a sale, when the buyers walk through the day before closing and you have taken the doors, they will refuse to close. So by taking these items when you are selling, you would disturb your sale.
In your case, I doubt that they would halt the foreclosure because you took the carpet.
Keep in mind that I am not addressing any possible “ethical” issues, just saying that from a legal standpoint I do not see how you can steal your own stuff.