Foreclosure and Personal Character
While on the treadmill this morning, I watched a piece on the Today Show that had me re-thinking the entire home foreclosure problem.
It turns out that most of the stripping is actually done by the homeowners as a goodbye gift to the lender and to their neighbors. (More about the neighbors in a minute.) These homeowners then try to sell the stuff on craigslist, etc. It is common practice not only in Arizona, but in California, Nevada, and Florida. Now the Feds are after them. Good.
What message does this send to Mr. ToughMoneyLove? It tells me that personal character has a lot to do with whether these stripper/criminals really should have been homeowners to begin with.
There are three primary reasons why we are experiencing a foreclosure epidemic. First, too many folks bought homes they couldn’t afford. Second, too many folks bought homes with no equity. Third, some homeowners suffered the dual misfortune of losing their job and living in a home that rapidly declined in value. It seems that a lot of folks in the first two categories also had severe character flaws, now revealed by their reactions to foreclosure.
Do any of these circumstances justify thievery? Absolutely not.
Rather than accept personal responsibility for their borrowing stupidity or acknowledging that they are the unintended victims of bad government economic policy, these bums take it out on the lender and neighbors.
Yes – the neighbors who remain are being victimized. The Today piece pointed out that most of these stripped foreclosures are being sold “as is.” In one case, a home that sold for $288,000 two years ago was stripped clean by its former owners and is now on the market as-is for $69,000. The neighbors are no doubt thrilled with that outcome.
This is what can happen when the financial worthiness of an individual is measured primarily by a credit score. It doesn’t take much in the personal character department to manipulate yourself into a high FICO score. Maybe the lenders are getting what they deserve in lending to low-lifes with high credit scores. Maybe they will learn their lesson and start to look at the entire financial picture – a return to real loan underwriting.
And the foreclosed home strippers? Let them live in tents – that leak.
Photo credit: respres