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Should or can a home owner be sued by the bank for damages to a property?

In the last week I've been in at least 15 bank owned properties. Of these, 3 really stuck out in my mind. What was so special about those 3? They had been damaged by the previous owner prior to the bank taking back the properties.

You see the banks had kicked out the owners and taken back the property in foreclosure. So, to get even, before they completely moved out, the sellers removed all the appliances and then took a sledgehammer to the property, along with wire cutters, pipe cutters and saws, and went to town on these homes.

These homes were completely destroyed and you could tell this was done within hours of the sellers moving out because everything else looked spotless, including the carpet, except for the saw marks made by a rotating saw. But, when they were done, the windows were broken, pipes cut, wires ripped out and the house looked more like a drug house than a home.

But, my question is, can the banks go back after these people for vandalism? Since it was their property prior to the courts taking the home back in foreclosure, could they do whatever they wanted with the home? What if their choice was to destroy the home to get even with the bank that now has a property that is clearly worth $50,000 - $70,000 less than it had been 48 hours prior?

Now, I don't agree with what these people have done with these properties, but at the same time a lot of these peoples have tried to do a short sale and sell the home but the banks wouldn't cooperate and just waited for the foreclosure to happen. They now feel the banks have ruined their credit and this is their revenge on the banks.

Is there anything we can do to help the banks prior to a foreclosure to assure that things like this don't happen to the homes they take back or is this just something we are going to have to deal with?

Respect Realty LLC (Expect More)

 

At Respect Realty, LLC our agents believe in 100% dedication to client satisfaction.  We specialize in property and land acquisition around the Portland Metro and Vancouver, WA area. We delight in working with first time home buyers and sellers to guide them from start to finish. Our doors are always open and we are always happy to assist you with your real estate questions.

 

Reach out today, we look forward to talking with you!

 

Todd Clark and Seraina Aguayo (Owners of Respect Realty)

Respect Realty LLC (Expect More)

(503)564-3130

info@RespectRealtyNW.com

www.RespectRealtyNW.com

 

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Comment balloon 21 commentsRespect Realty LLC • September 28 2008 12:49AM

Comments

They are destroying collateral for a loan and if it isn't illegal it should be. 

Posted by Richard T. Dolbeare, R(B), ABR, CRS...Hawaii Multi-Island Specialist (KW Island Living) almost 10 years ago

I do believe that Richard has a point.  The issue, I believe, would be proving that they were the ones who actually did this beyond just the circumstantial evidence.

Posted by Steve Shatsky almost 10 years ago

Great insight Todd. Richard also has a great point, but the foreclosed party says I have nothing for the bank to take so sue me. Nobody wins...

Posted by Paul S. Henderson, REALTOR®,CRS,, Tacoma Washington Agent/Broker & Market Authority! (RE/MAX Professionals.) almost 10 years ago

Since you can't get blood out of a turnip (Can you tell I am from the south) And if they had any money...they would be making house payments...Probably wouldn't do then any good to sue. There ought to be a national list you can put there name on, and they would have to pay damages before being allowed to buy another home in the future....

Posted by Sherry Scales, Realtor, for Austin, TX and surrounding areas (Austin Texas Homes, LLC) almost 10 years ago

Todd:  Pehaps being sued for damages would not work because they may be penniless... but I would think the damages they caused would at least be against the law... destruction of property... and get them some time in jail.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 10 years ago

This blog is great. The reality is the communities are getting hurt by these foreclosed homes.

Since it is leaving open places for problems and this hurts the communities. One town over from me has 250 foreclosed homes the town is trying to come up with plans

Posted by Edward moloney, Loan Officer Providing 5 STAR SERVICE (Edward Moloney Loan Officer GMH Mortgage Services) almost 10 years ago

Todd, It is amazing how many REO's that I see that are damaged by the previous owner. Yes, the banks could possibly sue, but then you cannot get blood out of a turnip! These people are mad and are taking their frustration out on the bank for taking their property away...

Posted by TeamCHI - Complete Home Inspections, Inc., Home Inspectons - Nashville, TN area - 615.661.029 (Complete Home Inspections, Inc.) almost 10 years ago

I suspect that no one ever expected things to go as far as they have on Short Sales, Foreclosures, etc.  I know that homeowners are frustrated and angry, but that does not make their actions right by destroying property.  ~ Evelyn

Posted by Evelyn Panning (Property Connections Realty Inc.) almost 10 years ago

Todd. Great questions and points raised here - unfortunately tempers can run high when the pressure of foreclosure is on people - this is no excuse for this behavior - on the other hand was the bank acting in good faith toward the former owners? Short sales in my opinion should be happening everywhere because they help to avoid such damage and if the home owner was trying to work things out with the bank through a short sale and the bank withdrew at the last minute and foreclosed......this is not going away any too soon. I hope and pray the banks will start to listen to the real estate professionals on this matter.

Posted by Judy Tuscano, NH Real Estate Professional (Prudential Verani Realty) almost 10 years ago

Homeowners who destroy the home deserve to be reprimanded somehow.  I am sure banks can go after the appliances and personal belongs as repayment.

Posted by Kathy Fey (Fey & Associates) almost 10 years ago

Todd, This issue is a huge problem in my area as well. The lenders need to start offering "cash for keys" much earlier in the process. I do believe the banks could sue and if nothing else get a judgement. BUT....proving who the vandals were would be very difficult.

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) almost 10 years ago

Todd, I've seen this happen several times. I guess the bank could sue, but would it do any good.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA almost 10 years ago

TC,

A mortgage is a deed of trust...and the lender (Mortgagee) certainly has rights to the property...until the loan is satisfied! Anyone destroying the property is destroying property of the lender as well as the record title owner!!! Thanks,   Fran

Posted by Fran Gaspari, "The Title Man" - Title Insurance - PA & NJ (Patriot Land Transfer, Inc.) almost 10 years ago

I showed one in Camas Wa. this past Thursday where the owners had taked some type of indigo ink and splattered all of the carpets throughout the house and knocked holes in the walls before leaving. What was once an $850,000 home is now a $500,000 reo and not getting any offers.

mark hall vancouver wa real estate

Posted by Mark Hall, Homes for Sale Vancouver Washington (Elite Realty NW - Keller Williams, Vancouver Washington) almost 10 years ago

Of course destroying the property is a horrible thing to do. I can understand the frustration and anger of being forced out of the home. Yes, I do believe that a bank can press charges against the former owners.

I read an article where the issue was very similar and the one that caused the damages was held liable.

Posted by Mott Marvin Kornicki, Waterway Realtors, Notary Public 786-229-7999 (Waterway Realty, Realtors® • Broker • South East Florida •) almost 10 years ago

Don't all deeds of trust habe clauses where the borrower agrees not to "commit waste"?    I'm not a lawyer, but it seem that sure would give the banks an ability to sue a seller who completely trashed a house.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) almost 10 years ago

Todd, the main issue is that of value. Is there any value in persuing a customer that has no assets? I would like to see them held responsible, but is it financially viable? Hard but honest decisions.

Posted by Fred Chamberlin, Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant (Guild Mortgage Co - Oak Harbor WA) almost 10 years ago

Todd, there are some very valid points made here on the comments.   Anger will bring out the worst in some people - their way of 'getting back.'   One solution to curbing this might be for the bank and homeowner agree to a 'peaceful forfeit' remedy. 

Posted by Karen Staha, CRS, GRI, ABR, REALTOR, Austin & Surrounding Areas Texas (Gaston & Sheehan Realty) almost 10 years ago

Todd great post. It seems, morally and ethically this should not be tolerated. Now the question is Legally I am sure damages over $500 is considered a Felony. Problem I see is the Legal system is so overburdened, that the prosecutors probably would not want to waste Tax payer's money on this type of legal wrangling. My perspective then we would have to pay to keep them in Jail. So they probably will get away with a  normally not tollerable action.

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) almost 10 years ago

Yes, the bank can and sometimes does sue - not so much today due to the volume.  As to not having money, there are many people today who walk away based on an "investment decision".  People with money who can afford to pay but, who look at a $200k loss as something tney'll never recoup and they simply walk. 

Posted by Andy Raffle, Team Leader - NMLS#156564 (Emery Federal Credit Union) almost 10 years ago

Richard - I agree, I just see way to many of these houses like this and I think it should be a crime.

Steve - In a small claims court would it have to me anything more than just by a preponderance of the evidence and in that case circumstantial evidence would be enough to win in court.

Posted by Respect Realty LLC, Brokers - Oregon / SW Washington Real Estate (Respect Realty LLC) almost 10 years ago

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