Living Car Free - Foreclose on the car--not the house!

I guess it's a tough choice for some people. My (rented) apartment was just foreclosed on. My former landlord still owns:

2006 Cadillac
2000 SUV
2007 VW Beetle
2008 Harley-Davidson motorcycle
32 foot sailboat that he uses once or twice a year


What's this all about?

If the loan was on the building, those items were, I'm guessing, not on the mortgage.

I do smirk a bit, though, at the fact that he was able to buy all that stuff... and can't pay his mortgage.

If the loan was on the building, those items were, I'm guessing, not on the mortgage.

I do smirk a bit, though, at the fact that he was able to buy all that stuff... and can't pay his mortgage.

My question is, why would a person keep all of those vehicles and lose the house? What kind of vallues does this conduct reflect?

My question is, why would a person keep all of those vehicles and lose the house? What kind of vallues does this conduct reflect?

I was pretty much agreeing with you. As to his personal reasons... I can't even guess.

Auto collection feeds on itself. You'll see people doing the same with electronics, computers, clothing, shoes, bicycles etc. He was searching for a meaning in his life.

The problem with auto collection is that it's probably the most expensive hobby on the planet and if you're not making great money, you'll go bankrupt. The owner should have caught himself and his addiction before continuing. His real problem was never resolved and the constant "Shopping" for new cars only made is situation worse.

My question is, why would a person keep all of those vehicles and lose the house? What kind of vallues does this conduct reflect?
Other people's choices seem crazy to me but its a free country, if the guy wants to keep his toys and loose the home its his choice. A few years ago a guy in a nice car started parking on my block. He was living out of his car. He packed everything in his trunk so when he drove around or applied for a job he appeared more "normal" than if he still had a home but had to bike to the job interviews right? Will you be evicted because landlord would rather have his cars than keep the rental property or is he just getting his personal home foreclosed on?

Other people's choices seem crazy to me but its a free country, if the guy wants to keep his toys and loose the home its his choice. A few years ago a guy in a nice car started parking on my block. He was living out of his car. He packed everything in his trunk so when he drove around or applied for a job he appeared more "normal" than if he still had a home but had to bike to the job interviews right? Will you be evicted because landlord would rather have his cars than keep the rental property or is he just getting his personal home foreclosed on?

Yeah, I'll be evicted, and a few other tenants of his already have been.

But isn't he losing the opportunity to buy more "toys"? It seems like the foreclosures would screw up his credit so badly that he won't be able to finance car purchases for quite a while.

Yeah, I'll be evicted, and a few other tenants of his already have been.

But isn't he losing the opportunity to buy more "toys"? It seems like the foreclosures would screw up his credit so badly that he won't be able to finance car purchases for quite a while.

It may, unless he has friends in the Small Business Administration. My wife used to work for them, and corruption (as with any government organization) ran rampant.
The thing I would normally advise is to figure out how to buy your own home. It may seem like an anchor, but as long as you live in someone else's house, you're subject to their whims, to an extent anyway.
Unfortunately, Asset forfeiture and eminent domain is making even homeowners less and less secure in their property.

So... there's a risk regardless of what you do. Maybe the guys living in their vans aren't so nutty after all.

It may, unless he has friends in the Small Business Administration. My wife used to work for them, and corruption (as with any government organization) ran rampant.
The thing I would normally advise is to figure out how to buy your own home. It may seem like an anchor, but as long as you live in someone else's house, you're subject to their whims, to an extent anyway.
Unfortunately, Asset forfeiture and eminent domain is making even homeowners less and less secure in their property.

So... there's a risk regardless of what you do. Maybe the guys living in their vans aren't so nutty after all.

I don't want to start the whole rent vs. own debate, but right now I'm kinda glad that I do rent. Even though I have to move out of a home that I love, I won't have any problems with my credit rating (unless I'm legally evicted). I haven't lost any quity in the housing decline either. If anything, it seems like rents are going down, so there's a good chance that I'll pay less for next home. And although this foreclosur thing has been stressful for me, I'm sure it's more wtressful for my former landlord.

I don't want to start the whole rent vs. own debate, but right now I'm kinda glad that I do rent. Even though I have to move out of a home that I love, I won't have any problems with my credit rating (unless I'm legally evicted). I haven't lost any quity in the housing decline either. If anything, it seems like rents are going down, so there's a good chance that I'll pay less for next home. And although this foreclosur thing has been stressful for me, I'm sure it's more wtressful for my former landlord.

Hell... if I were him, in his position, I'd sell all but one car, buy an airplane (s'what I do), and live on the boat. That'd be pretty sweet, though I have no idea how many other rental properties he may own, and whether his own home was involved in the foreclosure.

Hell... if I were him, in his position, I'd sell all but one car, buy an airplane (s'what I do), and live on the boat. That'd be pretty sweet, though I have no idea how many other rental properties he may own, and whether his own home was involved in the foreclosure.

He lives in a big house in the suburbs--bought just over a year ago, I think before the real estate bubble burst.

He lives in a big house in the suburbs--bought just over a year ago, I think before the real estate bubble burst.

Oy. It's probably kicking his ass, too. I gotta feel sorry for him, as he's probably WAY over his head now.

Yeah, I'll be evicted, and a few other tenants of his already have been.

But isn't he losing the opportunity to buy more "toys"? It seems like the foreclosures would screw up his credit so badly that he won't be able to finance car purchases for quite a while.

If he's upside down on the rental property but not on the toys, walking from the rentals might make sense. If he doesn't need credit for a few years he has time to get his score back up. Plus, if his rental business is a corporation, it won't effect his personal credit just like you owning Enron stock didn't effect your credit. He could sell the toys one by one as he needs cash but he'd lose money trying to sell the property. I don't know if this is true but this story makes his decision seem rational.

A lawyer once told me that while bankruptcy for an individual is a major hassle, for a corporation its just another financial tool to be used as the need arises. Your landlord maybe got a good salary from his little corporation - he bought his toys etc. Now that the corporation is in trouble it can dump assets as needed without reflecting badly on the stockholders credit score. Maybe the cars are really owned by the business too?

This storyline seems consistent with the optimal way our free market economy is supposed to allocate resources. Landlords get in trouble and evict people so the more people looking for housing jacks rents up so other landlords can still profit and eventually rents get back to their optimal value. Rents were probably artificially low due to all the people speculating in rental properties. Your rent may have been subsidized by the landlord's expectation of rising value of the property. Renters may just have to suck it up and pay higher rents in order to get the landlords back to living the easy life.

hmm he might be sans cars and boat soon too if he wrote those loans against his real estate..

Why are you being evicted?
I would think the new owner (bank or otherwise) would want renters in their apartment.

most likely if he is an intellegent business person the building and the cars are totally unrelated. If he is really smart they are all owned by seperate S-Corps. Sometimes it is just cheaper to walk away from something as a BUSINESS, this really shouldn't play a part in a person's personal assets if they used proper business planning.

With the depressed market you really might want to think about buying a house. Intrest rates are at an all time low too.

Joe

...The problem with auto collection is that it's probably the most expensive hobby on the planet...

Hmmm - I know of another one that is just as expensive - plus when they go into the ground - you can lose ALL of it.

Remote control jets (http://www.bvmjets.com)

If you scroll down, you can the price of a kit - click on "Turbine Power", you'll see the price for the power plant...that does NOT include radio and some other gear you need. My friend lost one of his planes - total loss - $8000 GONE!! Of course when you drive a car off the lot, it's pretty much the same thing but you have something still.

Amen, schu.

http://www.youtube.com/watch?v=aRmg88t35Y0

8 turbines, probably around $5k each, not to mention the rest of the airplane, 24' wingspan...

Yep - seen that video before too - shame, pretty jet. I think the cause was wind was bit much at the time - and not enough movement on the controls.

Another thought on that - I wouldn't be surprised it was carrying close to 3 gallons of fuel. Those engines when at full power can consume 20 ounces of fuel a minute...or somewhat around there.

Never did get into the turbines - too much money, but did get into the ducted fans - still have two of them, but no time nor money to go fly them in the last couple of years.

http://www.youtube.com/watch?v=aRmg88t35Y0




ha ha

My former landlord still owns:

2006 Cadillac
2000 SUV
2007 VW Beetle
2008 Harley-Davidson motorcycle
32 foot sailboat that he uses once or twice a year




He lives in a big house in the suburbs--bought just over a year ago, I think before the real estate bubble burst.
And he is probably still enjoying the use of his house and toys and is minus one piece of real estate which he may or may not have wanted that much.

You are looking for a place to live. Are you dissing the landlord for his ability to maintain his lifestyle?

And he is probably still enjoying the use of his house and toys and is minus one piece of real estate which he may or may not have wanted that much.

You are looking for a place to live. Are you dissing the landlord for his ability to maintain his lifestyle?

if the apartment he owns is being forclosed - thus losing what I'd imagine to be a nice, steady, passive income source, then no, he obviously *can't* maintain his current lifestyle. If the apt. is in his personal name, then all his other loans, & future loans, will suffer. At the very least he's prob. got a thousand or more in legal bills just because of this (either personally or thru the corp).

Edit: I'd be interested in the boat. hehe
And Roody - you shouldn't automatically be evicted. If you've got a lease, you'll prob. have to move by the end of it. Otherwise, you do have a right to stay there, just because the owner changes doesn't mean you have to move out.

My question is, why would a person keep all of those vehicles and lose the house? What kind of vallues does this conduct reflect?

He is probably underwater on the mortgage, and figured it was easier to just let the bank have the thing rather than wait for the price to recover. I am not saying that it is ethical for people to just walk away when they are in a situation like this, but I hear of it happening all over the place.

It may, unless he has friends in the Small Business Administration. My wife used to work for them, and corruption (as with any government organization) ran rampant.
The thing I would normally advise is to figure out how to buy your own home. It may seem like an anchor, but as long as you live in someone else's house, you're subject to their whims, to an extent anyway.
Unfortunately, Asset forfeiture and eminent domain is making even homeowners less and less secure in their property.

So... there's a risk regardless of what you do. Maybe the guys living in their vans aren't so nutty after all.

First, that's an absurb statement. Second, if your wife thought something improper was going on, why didn't she report it to the IG?

Why are you being evicted?
I would think the new owner (bank or otherwise) would want renters in their apartment.

Good question... why would the bank want to lose all revenue from this property?

If they have any hope of selling the property, having paying tenants with leases is a major bonus.

Pretty strange.

Good question... why would the bank want to lose all revenue from this property?

If they have any hope of selling the property, having paying tenants with leases is a major bonus.

Pretty strange.

Indeed. Roody, are you sure the landlord just didn't tell you he was foreclosed as some sort of ploy to get you out? Who is the owner of the building now? The bank, the same landlord or someone else. Whichever, your written lease should still be a valid contract until expiration unless there is some sort of clause that it is cancelled upon change of ownership.. It is written isn't it?

If a renter can be thrown out due to a property foreclosure depends on the US state you're in, as I recall. I'm not an expert, but I haven't heard any state that automatically allows you to finish your lease term. The different states just allow different amounts of time for renters to move out, and banks generally don't have the means set up to manage rental properties themselves, nor do they wish to hire a rental management company.


My question is, why would a person keep all of those vehicles and lose the house? What kind of values does this conduct reflect?
My theory is that he got easy financing for the real estate/property, and then took out lines of credit against the property to buy the cars/boat/motorcycle.

A further guess is that he knows that he is so far underwater on the property that even if he sold the cars/boat/motorcycle, he would now not get enough to pay off the house loan anyway--or maybe,,, it is now evident that he bought an overpriced property, and he is no longer interested in paying it off at the price he agreed to buy it for.

If you bought a house for $300K and a year after moving in, the value dropped to $200K, the smart thing to do is renegotiate the principal amount, and if the bank refuses, then you should default on the loan. It's a simple business decision, values (in terms of character) got nothing to do with it.


The joke on him is that lots and lots of other people out there are doing pretty much the same thing he (probably) is, and soon in many states the used-vehicle market is going to be flooded with fairly-new cars, driving the resale prices downward. The Kelly Blue Book is going to need some MAJOR revisions over the next couple years.

-----

The US housing boom was caused by a lot of people signing for properties when they knew that if the value did not go up, they'd go broke. Alt-A, sub-prime, interest-only, it doesn't matter--if you sign something, it's your responsibility to make sure you understand it. They signed for loans they simply could not pay for.
~

I agree with others who suggest that his vehicles may be in a shaky position as well.

It could be that when he bought the property he was very leveraged and now he is upside down with respect to that property since property values have probably fallen.

Another thing I really wonder is, how many people could afford to keep up their mortgages, if only they would sell their cars, or at least some of their cars?

And why do people not see it as wrong or bad to renege on an agreement--a promise-- that they made to keep up payments for 30 years. I can understand that a lot of people have lost their jobs, and they honestly are unable to continue mortgage payments. But others (like my landlord) are still able to make the payments--but they put higher priority on their cars and toys and are merely unwilling to make the mortgage payment. Is this not an ethical problem?

Indeed. Roody, are you sure the landlord just didn't tell you he was foreclosed as some sort of ploy to get you out? Who is the owner of the building now? The bank, the same landlord or someone else. Whichever, your written lease should still be a valid contract until expiration unless there is some sort of clause that it is cancelled upon change of ownership.. It is written isn't it?

This is what I used to think. But in Michigan (and most states), the mortgage takes priority over the lease, as long as the mortgage was recorded before the lease. The mortgage company (Countrywide) owns the house now. My landlord has 6 months to reclaim it, but he clearly has no intention to do this. Countrywide can legally evict me whenever they want. The problem with being evicted is that it can make it hard to rent in the future, and I think it goes on your credit record.

I think you're right that the lease is still a valid contract, but it's a contract between me and the former landlord, not between me and Countrywide Home Loans, Inc. If I have any recourse, it's against the landlord. He probalby should pay reasonable moving expenses, at least.

BTW, my landlord never told me he had lost the house. He evidently intended to keep collecting the rent from me. The mortgage company is required to post a copy of the foreclosure notice on the property, and that's how I found out. The notice said that they considered the property to be "abandoned."

BTW, my landlord never told me he had lost the house. He evidently intended to keep collecting the rent from me. The mortgage company is required to post a copy of the foreclosure notice on the property, and that's how I found out. The notice said that they considered the property to be "abandoned."

So essentially you are squatting until they get around to asking you to leave. I have read about quite a few people who are doing this these days on various housing bubble blogs - they save the money that they would have spent on rent and use it for moving expenses and all that. The thing I don't know is how you know when the auction is actually scheduled...

In some states & cities, there is a now a requirement that tenants be given reasonable notice before they are evicted as a result of a landlord being foreclosed upon. There have been cases where tenants have been completely blindsided when the sheriff shows up - that hadn't known that there was a problem, and they had been continuing to pay rent to the old landlord right up until the very end.

This is what I used to think. But in Michigan (and most states), the mortgage takes priority over the lease, as long as the mortgage was recorded before the lease. The mortgage company (Countrywide) owns the house now. My landlord has 6 months to reclaim it, but he clearly has no intention to do this. Countrywide can legally evict me whenever they want. The problem with being evicted is that it can make it hard to rent in the future, and I think it goes on your credit record.

I think you're right that the lease is still a valid contract, but it's a contract between me and the former landlord, not between me and Countrywide Home Loans, Inc. If I have any recourse, it's against the landlord. He probalby should pay reasonable moving expenses, at least.

BTW, my landlord never told me he had lost the house. He evidently intended to keep collecting the rent from me. The mortgage company is required to post a copy of the foreclosure notice on the property, and that's how I found out. The notice said that they considered the property to be "abandoned."

That sums it up.
This is a common problem and I think it should be criminal.
I had a co-worker who was paying on an defaulted house for several months. They had one month to move.

I find it really scarry riding my bike as all the empty houses around here is sad. Should be another housing boom around the corner for sure.

This is what I used to think. But in Michigan (and most states), the mortgage takes priority over the lease, as long as the mortgage was recorded before the lease. The mortgage company (Countrywide) owns the house now. My landlord has 6 months to reclaim it, but he clearly has no intention to do this. Countrywide can legally evict me whenever they want. The problem with being evicted is that it can make it hard to rent in the future, and I think it goes on your credit record.

I think you're right that the lease is still a valid contract, but it's a contract between me and the former landlord, not between me and Countrywide Home Loans, Inc. If I have any recourse, it's against the landlord. He probalby should pay reasonable moving expenses, at least.

BTW, my landlord never told me he had lost the house. He evidently intended to keep collecting the rent from me. The mortgage company is required to post a copy of the foreclosure notice on the property, and that's how I found out. The notice said that they considered the property to be "abandoned."

Thanks for the explanation, Roody. Good luck finding another suitable place. As someone else pointed out, at least you are currently saving money by living rent free. Better watch out, though that the utilities don't get turned off one day when it is zero degrees. Would be a heck of a time to be looking for a place then with the pressure of a frozen apt pushing you to take the first place you can find.

BTW, my landlord never told me he had lost the house. He evidently intended to keep collecting the rent from me. The mortgage company is required to post a copy of the foreclosure notice on the property, and that's how I found out. The notice said that they considered the property to be "abandoned."

Roody, this reads like it is a good time for the tenants to get together and approach the bank about purchasing the property as a co-op. They might give you a good deal to take it off their hands.

Check internet sites like :
http://www.coophousing.org/
for advice.

Roody, this reads like it is a good time for the tenants to get together and approach the bank about purchasing the property as a co-op. They might give you a good deal to take it off their hands.

Check internet sites like :
http://www.coophousing.org/
for advice.

And probably at a bargain rate! You could all be paying a lot less rent.

Thanks for the explanation, Roody. Good luck finding another suitable place. As someone else pointed out, at least you are currently saving money by living rent free. Better watch out, though that the utilities don't get turned off one day when it is zero degrees. Would be a heck of a time to be looking for a place then with the pressure of a frozen apt pushing you to take the first place you can find.

Thanks. I'm already paying for the gas (heat and hot water) in the name of "current occupant." I'm trying to get electric and water set up on the same basis if possible, or else have it switched to my name.

I'm afraid I got this thread off-topic. I didn't mean it to be about me--but about the idea that people are foreclosing on their houses but continuing to make payments on their cars. In many cases the car payment must be almost as high as the mortgage payment. Carfree would be an option for some people, but they may not even think about it, or really even know that it's possible to live without a car.

Roody, this reads like it is a good time for the tenants to get together and approach the bank about purchasing the property as a co-op. They might give you a good deal to take it off their hands.

Check internet sites like :
http://www.coophousing.org/
for advice.

Thanks gwd--that's a great idea nad I hope poeple take advantage of it. I'm the only tenant where I live (it's a duplex, and the guy downstairs moved out before the foreclosure) so it isn't an option for me, unfortunately.

I'm afraid I got this thread off-topic. I didn't mean it to be about me--but about the idea that people are foreclosing on their houses but continuing to make payments on their cars. In many cases the car payment must be almost as high as the mortgage payment. Carfree would be an option for some people, but they may not even think about it, or really even know that it's possible to live without a car.

But Roody your example was not of a person choosing between his house or his cars, but a rental property and his cars. You already stated that he is still living just fine in his house with his various toys.

This is what I used to think. But in Michigan (and most states), the mortgage takes priority over the lease, as long as the mortgage was recorded before the lease. The mortgage company (Countrywide) owns the house now. My landlord has 6 months to reclaim it, but he clearly has no intention to do this. Countrywide can legally evict me whenever they want. The problem with being evicted is that it can make it hard to rent in the future, and I think it goes on your credit record.



Yes, you are correct, but as others have mentioned, many states and cities have passed new laws very recently, in response to this very thing, that requires the new owner/mortgage holder to allow the current tenants to finish out the terms of their lease, or at the very least, 90 days. I am certainly not familiar with Michigan laws, but there is no doubt some sort of free/low cost legal aid in almost every area that can help you out. If nothing else, contact Countrywide (you said that they are the mortgage holders, right?), and see what you can negotiate with them

being evicted doesn't go on your credit report in the vast majority of cases. the only time it may is if you owed a significant amount of money for rent or damages, and/or have had a judgment entered against you for those things. there is a "blacklist" that renters can check for potential tenants to see who has been evicted and why, but these things don't happen automatically, and you are not going to be entered into any of those lists because the owner got foreclosed on. it sucks, but just find a new place to live. try to get a reference from the old landlord, otherwise just explain the situation to new potential landlords and offer to show them receipts/canceled checks for the time you lived where you are now to show you consistently payed your rent on time.

http://www.palmbeachpost.com/business/content/business/epaper/2009/01/13/0113renters.html

By ALAN ZIBEL

The Associated Press

Tuesday, January 13, 2009

WASHINGTON — Mortgage finance company Fannie Mae said Tuesday it has adopted a policy allowing renters to remain in their homes even if their landlord enters foreclosure.

The policy will allow renters living in foreclosed properties to sign new leases with Fannie while the property is up for sale.

Sibling mortgage financier Freddie Mac, based in McLean, Va., is working on a similar policy, company spokesman Brad German said.

But Amy Marx, an attorney with New Haven Legal Assistance in Connecticut, said Freddie Mac has not been responsive to requests that it do the same, and has continued with evictions of renters in recent weeks.

"We are thrilled that Fannie Mae has done the right thing," she said. "Our hope that Freddie Mac will follow their lead."

Many households in Connecticut, she said, haven't been notified of Fannie Mae's policy change. Another concern, she said, is that real estate agents charged with selling the properties won't notify tenants that they can stay.

New Haven Legal Assistance represents several tenants facing eviction on properties held by Fannie Mae.

Fannie Mae and Freddie Mac said last week they will extend a suspension of foreclosure sales and evictions from single-family homes through the end of January.

The companies had suspended foreclosures through the holidays.

The government-controlled home loan giants said the extension will allow borrowers facing foreclosure to keep their homes as they work to modify more loans.