It's a 12 minute video about foreclosed houses in Southern California where the bank contracts a crew to go into a house that has foreclosed and remove everything. These are nice houses were the people just drove away leaving everything. It all goes into a landfill. It sounds like they try and arrange for charity organizations to pick the stuff up, but that it often doesn't work out. I'm not surprised that the banks are working this way though.
Nitedreamer and I have been looking at buying a house lately, and have been through many foreclosed homes. The banks usually want more than people are willing to pay, especially considering that most of the houses have been gutted or trashed, and won't negotiate at all. Our agent told us they often reject offers of a short sale, let the house sit for a year and rot while the paperwork goes through, and then are forced to sell it far below what the short sale offer was.
We are probably all sick of hearing about the ‘bailout’, but I think it is interesting that very little has been said about what will happen with the actual houses. It strikes me as incredibly irresponsible for the contents of these houses to just be trashed. If the bank won’t deal with it responsibly, then why can’t the government do something about it? Surely they can store it somewhere and sell it over time? Putting it in a landfill is probably the most stupid thing they can do with it. Then there is the issue of the house itself, perhaps this is not a problem in other parts of the country, but the weather is hard on vacant houses here – pipes will freeze and burst in winter, and mould will form in summer. What is going to happen to these homes? I’m guessing that many will need to be destroyed, or else gutted and repaired. That is a lot of waste is going into landfills, and a lot of construction in the future (no doubt with the cheapest, most nasty materials they can find…).
What do you think can be done about this problem? Most people seem to agree that we should not reward the bad economic behavior of people who purchased houses they could not afford, but I think this answer is too simple. There is one family in the video who paid $399,000 for a house that is now only worth $180,000. That isn’t necessarily bad behavior – they can afford it, but walking away is probably looking like an attractive option for them.
