When Do Dead-Beats Get the Boot?

R

roundcorners

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Since Erika profile these homes for sale back in December 28th, I been keeping track of this home in Woodbury... 21 Twin Gables...

21 Twin Gables, Woodbury

* Amount owed: $907,649.93
* Last sale: Dec. 2006, $1,058,000
* Auction date & time: Jan. 13 at 10 a.m.
* Location: In front of the flagpoles at Placentia Civic Center, 401-411 E. Chapman Ave.
* Information: 530-672-3033

http://irvinehomes.freedomblogging.com/2009/12/28/these-irvine-homes-are-going-to-auction-3/12107/

And every so often, I make it a point to walk by the house; 1/13th came and went and still nothing... no for sale sign, no sign of distress, no sign of owners preparing to move...

We all know IR famous foreclosure chart...

ARM%20Reset%20to%20Final%20Sale.jpg


So the owners have not made a payment in 200+ days now, is it bank owned, REO yet? The days I pass by, the house looks like it always does, people enjoying their free home, today; as I walked by the garage door opened, two cars parked inside, a BMW X5 & a 6 Series... this just blows me away!

In the chart above, when do home debtors usually walk away; and at which point does the Sheriff show up at your door?
 
Which begs the question, since we all know that the the bulk of the first mortgage payments are interest... how much does the bank really lose? With all the gov't help and the stuff that graph talked about before... why not drag your feet? It costs money to process a foreclosure... does that cost more than just letting it sit there and then getting to it once you think the market has turned around or there is a company that will buy your distressed inventory without you having to deal with auction etc etc?
 
those unpaid property taxes + HOA fees add up. I'm guessing the cost of carrying these things could get very costly if they kept waiting and waiting (and waiting and waiting) for the market to turn around. Seems like it would serve them best to get a could chunk of these sold now while inventory levels are so low.

But then of course, that opens them to the possibility of being insolvent when they have to write down their assets.

PS. As of right now, 910 auctions scheduled for next Tuesday. Lets see how many don't get postponed.

On a side note, 68 Townsend in Woodbury went to a 3rd party on 2/3/10 and is already on the market!
 
HOAs fees: previous owners fees get discharged when the bank takes the house back, then the bank has to start paying (or pay when they sell). no incentive to take the house back.

property taxes: they will come out of the next sale of the house, again no incentive to take it back early.
 
HOA fees: So the HOA debt can/does follow the owner that incurred the fees, right?

Property taxes: So the lender pays the property taxes while it's in default. Then the next owner is charged the property taxes that the bank paid.
 
[quote author="jvna"]

Property taxes: So the lender pays the property taxes while it's in default. Then the next owner is charged the property taxes that the bank paid.[/quote]

I dont think this is accurate. The bank becomes the owner and therefore as the owner, is responsible for the property taxes for the duration of their ownership.
 
[quote author="qwerty"]
[quote author="jvna"]

Property taxes: So the lender pays the property taxes while it's in default. Then the next owner is charged the property taxes that the bank paid.[/quote]

I dont think this is accurate. The bank becomes the owner and therefore as the owner, is responsible for the property taxes for the duration of their ownership.[/quote]

That's what I thought. I was confused with FreedomCM's comment "property taxes: they will come out of the next sale of the house, again no incentive to take it back early." Maybe the statement says that the cost will just be added to the next sale of the house.
 
the prop taxes that the FBs don't pay will have to be paid by the bank when they FC on the house. They do not have to pay any past-due HOA fees. The HOA can go after the FB separately for them if they think it is worth it

Once the house is REO, the bank can either pay them while it is REO or elect to not pay them, incurring the penalties. IIRC, in CA you can not pay your taxes for 5 years before the county can take action.

If/when the bank does sell the REO, the bank has to pay any due/past due RE taxes to complete the transfer. The money to do so would come out of the selling amount (theoretically, though with giant pools of money...).

The buyer wouldn't have to pay the taxes separately, or "on top" of the agreed upon price, just the market price.
 
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