Can't sell house, bought unfinished, can I strip it?

[Jdsmitty10]

Pennsylvania.

I bought a house in 2006 before the market drop. The house was a new construction where we "low balled" the builder and finished the house on our own. We put the deck on, kitchen appliances, all carpet, finished the basement, etc after the sale.

We have moved to our hometown this past July. We have tried selling our house since about two years ago. At this point our asking price is just above what we owe and we are stuck. We tried renting it ourselves and through a realtor. No luck.

We are getting sick of making the payments on a house that won't sell for even close to what we paid for it BEFORE finishing the damn thing.

We have great credit and really don't want to ruin it but c'mon what do we have I do??!?? We tried refinancing multiple times with multiple banks and our house lost too much value where'd we would have to take mortgage insurance to refinance. Which is bs. We make every payment and even made extra ones at first til we relized it wasn't worth it. We have tried every route possible to know avail. We have land at our new location and want to build a house( one we will want to stay in forever if u know what I mean after this terrible home buying experience). So we are prob about a month or two out of getting a construction loan on a new house and stopping payment on our house we are no longer living in. Now since WE put the deck on, appliances in, carpet, finished basement etc, is it illegal for us to strip that stuff out of the house before we stop paying? Thst stuff was not included in the loan so I wouldn't think it would be. Any suggestions and advice is appreciated. Thank you. I quite frankly want to say screw you to the bank since we tried multiple times to make a change to our payments to either rent it or whatever and they gave us a big screw you since we make all of our payments. We tried loan mods, refis, selling it, etc with no luck.

 

[sandyclaus]

Pennsylvania.

I bought a house in 2006 before the market drop. The house was a new construction where we "low balled" the builder and finished the house on our own. We put the deck on, kitchen appliances, all carpet, finished the basement, etc after the sale.

We have moved to our hometown this past July. We have tried selling our house since about two years ago. At this point our asking price is just above what we owe and we are stuck. We tried renting it ourselves and through a realtor. No luck.

We are getting sick of making the payments on a house that won't sell for even close to what we paid for it BEFORE finishing the damn thing.

We have great credit and really don't want to ruin it but c'mon what do we have I do??!?? We tried refinancing multiple times with multiple banks and our house lost too much value where'd we would have to take mortgage insurance to refinance. Which is bs. We make every payment and even made extra ones at first til we relized it wasn't worth it. We have tried every route possible to know avail. We have land at our new location and want to build a house( one we will want to stay in forever if u know what I mean after this terrible home buying experience). So we are prob about a month or two out of getting a construction loan on a new house and stopping payment on our house we are no longer living in. Now since WE put the deck on, appliances in, carpet, finished basement etc, is it illegal for us to strip that stuff out of the house before we stop paying? Thst stuff was not included in the loan so I wouldn't think it would be. Any suggestions and advice is appreciated. Thank you. I quite frankly want to say screw you to the bank since we tried multiple times to make a change to our payments to either rent it or whatever and they gave us a big screw you since we make all of our payments. We tried loan mods, refis, selling it, etc with no luck.

SO, basically, you didn't do your homework before sinking your blood, sweat, and tears into a house that won't sell for nearly what you hoped and not much more than you currently owe, and you want to stick it to your mortgage company for your mistake? That's almost laughable if I didn't think that you really intended to do so.

Sure, you make all your payments - exactly as they are. Why would the mortgage company offer you a modification if you're not having trouble making your payments? And technically speaking, all of the modifications you made to the property - the improvements, the add-ons, and the built-in appliances - are the only things making the property worth what it is right now. If you were to default on your payments AND strip the house, you bet that would be illegal - and unconscionable, considering that the bank isn't the one that dug this hole you've now placed yourself in.

 

[justalayman]

a very quick look shows that PA is a recourse state. That means the lender can come after you for any deficiency remaining when the house is sold at auction. If you choose to cause it to be worth less than it is now, have at it. If the lender has a problem with it, they will come after you for the money, including what you caused it to be devalued.


can you qualify for both the existing mortgage and a new mortgage simultaneously? If not, it would mean you would have to get rid of the first mortgage so it would be beneficial to not trash the house first.

At this point our asking price is just above what we owe and we are stuck.

then lower the price and make up the difference out of pocket.

I quite frankly want to say screw you to the bank since we tried multiple times to make a change to our payments to either rent it or whatever and they gave us a big screw you since we make all of our payments

How did the bank screw you? They loaned what you asked for, right? All they want is what you contracted to pay them. Not sure how you get that they are screwing you out of that.

 

[Jdsmitty10]

So your saying I didn't do my home work in not knowing the market would crash???!?? Buying a house at the time I bought was "the best investment". Everyone said it. It was my first house. It appraised for $230k when I bought. I paid $185k and only put about 20k into it. Now I'm lucky if it appraises for $160k. How is that ME not doing my homework??!??!??!?? And how is it illegal to remove things that weren't on the original loan?!? I paid cash for everything that was added. I did not put it on the mortgage loan.

 

[Jdsmitty10]

I say they screwed me since I tried every route possible to lower my payment and get a renter in there. I tried refi, it lost too much value where it would have been pointless to refi since mortgage insurance would have been added in. I tried a mod(took a 22k pay cut at my new job) they said screw you on that. And of course I have tried selling it. It seems there's only help out there for a criminals and people who don't pay their bills...I'm just fed up with the bs. Will I ever default? Prob not cause I don't want to ruin my perfect credit score. This is just thoughts going through my mind.

 

[Mass_Shyster]

is it illegal for us to strip that stuff out of the house before we stop paying?

It's not illegal, so the police won't come knocking. But since it's attached to the property it became part of the property. Removing those would be considered "waste", and the bank can sue you for decreasing the value of their mortgage.

I believe the bank took just as much of a risk as you did when they loaned you the money to purchase the house, so I'm not a member of the "you must take the loss yourself" club. You can certainly force the bank to absorb the loss, but doing so will make other lenders leery of lending to you.

You should compare how long it will take you to get this monkey off your back vs how long to rebuild your credit. It your credit score really worth that much?

 

[Jdsmitty10]

I have an offer on my house that puts me about 7500 in the hole at closing. I am "contemplating" what to do. Makes me sick to have to lose that on top of what is already down the drains in the house. When applying for the modification I saw a "deed in leu of foreclosure " option. How bad does that hurt the credit score. I would rather do that than take a loss of cash if it won't hurt my cred as bad. Anyone know?

 

[Zigner]

You could continue to do exactly what you agreed to do. Yeesh, what a sense of entitlement...

 

[Mass_Shyster]

I saw a "deed in leu of foreclosure " option. How bad does that hurt the credit score. I would rather do that than take a loss of cash if it won't hurt my cred as bad. Anyone know?

The bank is not likely to offer you a "deed in lieu of foreclosure" option if you are current on your payments. They offer that when they think it's their best option. Since you have demonstrated that you are willing and able to continue making your payments, they will want you to continue doing exactly that.

They will offer that when you are behind on you payments and they have started the foreclosure process, because it's cheaper and faster for them than a foreclosure.

Your only negotiating power with the bank is the fact that you may default, and they don't want that. Until you show that you may, in fact, default, by skipping a bunch of payments (and trashing your credit score in the meantime), they're not likely to release you from your current obligation.

Honestly, if you can get out of this mess for $7,500, you should consider it. But keep in mind that values may increase, so next year you may be able to get out with cash in your pocket.

 

[justalayman]

It's not illegal, so the police won't come knocking. But since it's attached to the property it became part of the property. Removing those would be considered "waste", and the bank can sue you for decreasing the value of their mortgage.

I believe the bank took just as much of a risk as you did when they loaned you the money to purchase the house, so I'm not a member of the "you must take the loss yourself" club. You can certainly force the bank to absorb the loss, but doing so will make other lenders leery of lending to you.

You should compare how long it will take you to get this monkey off your back vs how long to rebuild your credit. It your credit score really worth that much?

If my initial info is correct, no, they cannot force the bank to take the loss. If PA is a recourse state, that would mean the lender does have actions available to make a claim for any deficiency should the borrower try to make the lender absorb the loss against their will.

Smitty

If you can get out with a $7500 loss you might consider taking that route. It would allow for the fastest and least (long term) damage.

You might consider approaching the bank with the possibility of a short sale also. Maybe asking the bank to take that amount of loss or splitting it with you in some way.

 

[Mass_Shyster]

If my initial info is correct, no, they cannot force the bank to take the loss.

Sorry, I wasn't clear. I meant one can force the bank to take the loss through bankruptcy.

 

[justalayman]

Sorry, I wasn't clear. I meant one can force the bank to take the loss through bankruptcy.

BK over $7500? Kind of foolish even if a possibility. Of course since OP is looking at a construction loan, that would suggest the BK may put a halt to the build there as well.

If he is considering this route, he needs to speak with a BK attorney that can review the OP's proposed timeline and give him some idea how it may affect his plans.

 

[latigo]

It's not illegal, so the police won't come knocking (?). . . . .

Steve, are you confident that such proposed activity would not be a crime in Pennsylvania? It is in other states. Examples - New York Penal Code Section 185.10 and California Penal Code Section 538.

 

[justalayman]

Steve, are you confident that such proposed activity would not be a crime in Pennsylvania? It is in other states. Examples - New York Penal Code Section 185.10 and California Penal Code Section 538.

S 185.10 Fraudulent disposition of mortgaged property.
A person is guilty of fraudulent disposition of mortgaged property
when, having theretofore executed a mortgage of real or personal
property or any instrument intended to operate as such, he sells,
assigns, exchanges, secretes, injures, destroys or otherwise disposes of
any part of the property, upon which the mortgage or other instrument is
at the time a lien, with intent thereby to defraud the mortgagee or a
purchaser thereof.

that would appear to not include anything altered after the lien is obtained

538. Every person, who, after mortgaging any of the property
permitted to be mortgaged by the provisions of Sections 9102 and 9109
of the Commercial Code, excepting locomotives, engines, rolling
stock of a railroad, steamboat machinery in actual use, and vessels,
during the existence of the mortgage, with intent to defraud the
mortgagee, his or her representative or assigns, takes, drives,
carries away, or otherwise removes or permits the taking, driving, or
carrying away, or other removal of the mortgaged property, or any
part thereof, from the county where it was situated when mortgaged,
without the written consent of the mortgagee, or who sells,
transfers, slaughters, destroys, or in any manner further encumbers
the mortgaged property, or any part thereof, or causes it to be sold,
transferred, slaughtered, destroyed, or further encumbered, is
guilty of theft, and is punishable accordingly. In the case of a
sale, transfer, or further encumbrance at or before the time of
making the sale, transfer, or encumbrance, the mortgagor informs the
person to whom the sale, transfer, or encumbrance is made, of the
existence of the prior mortgage, and also informs the prior mortgagee
of the intended sale, transfer, or encumbrance, in writing, by
giving the name and place of residence of the party to whom the sale,
transfer, or encumbrance is to be made.

with intent to defraud the mortgagee,

may I suggest that removal of improvements made after the mortgage loan had been secured would not be with the intent to defraud the mortgagee? Similar to the NY statute, the law is intended to apply to causing damage to the structure such that it would devalue the building from the condition it was at the time of the attachment of the encumbrance and with specific intent to defraud the mortgagee. That does not appear to be applicable to the OP's situation, He is not attempting to remove anything existing at the time of the placement of the lien.




but even with that in mind:

ithe removal of anything means the OP must replace the removed item with one similar to what was present at the time of the purchase or in removing some addition it leaves the building in an unfinished condition where as it was finished (such as when attaching a deck to a wall and having had to remove siding to allow for that), the OP would be required to return the building to a condition similar to what it was at the time of the placement of the lien.

If he failed to do that, then I can see the criminal laws as being applicable.

 

[Mass_Shyster]

Steve, are you confident that such proposed activity would not be a crime in Pennsylvania?

Nope. Didn't check first.

It is in other states. Examples - New York Penal Code Section 185.10 and California Penal Code Section 538.

The NY statute cited does not seem to apply, unless there is an intent to defraud the creditor. That's somewhat lucky for me, and doesn't excuse my lack of diligence.

BK over $7500? Kind of foolish even if a possibility.

I thought it was closer to $40K when I made the unclear comment.