Once in a while we are asked to "Watch" a house that is distressed, or in the process of being foreclosed. It is not fun but it is a part of life in West Michigan. REO properties seem to be declining but there are still some going through this in Muskegon, Oceana, Newaygo, Ottawa, and Kent Counties. We drive by and take pictures now and then and may talk with the borrower. We try to learn if they intend to redeem the house or if they are going to just walk away at the end of the redemption period and let the lender have it back. Usually they are not very happy and won't talk to us, and I can not say that I blame them. They are under a lot of stress and feel they are losing a very important part of their financial worth and self-esteem.
These people need to talk to a Realtor. They need to explore their options. They have a few options but most are not aware of any options and they are angry, frustrated, and hurt. Once again, I can not blame them.
Last week a borrower called to tell me that they would be out of their house over the weekend. I appreciated the fact that she cooperated with me in transferring the electric service but if they had talked to a Realtor, they may have saved themselves a lot of work. When they left they took just about everything, including the kitchen sink, the kitchen cabinets, the interior trim, the steps going up to the door between the house and the garage, and even both garage doors! They worked their fannies off!
If they would have talked with an Realtor they may have learned that the lender would pay them a tidy relocation fee to leave the kitchen sink, cabinets, trim, steps, and doors. The lender doesn't want to spend any money on fixing the house up and now it will sell for a very low price. This hurts the lender and the neighbors as well.
OTOH, if the lender would have allowed me to tell the borrower that the lender would pay them to leave it in "Broom Clean" condition, everyone would have come out better. If they would have stayed past the redemption period, I could have offered them a tidy sum. We all lost on this one!
- They would have walked away with some cash in their pockets
- They wouldn't have had to work on removing all of the things they took
- They wouldn't have a bunch of used building materials to store and wish they could sell
- The lender would have come out better because the home would have been in sale-able condition
- The lender would have been able to recoup more of the money they loaned on the house
- The home would have sold for more money in a shorter amount of time
- The neighbors homes would have held their value
I didn't expect the borrower would trash the house but I still wasn't allowed to offer them any cash. If I could have offered them $4,000. the house would have most likely been in live-in condition and the bank would have been $50,000. better off.
If you know of anyone in this situation, help them find a professional to talk to! Many Realtors have taken extra training to help with these issues and will be more than happy to help. If they are in Michigan, I would be happy to do what I can to help. It may save them a lot of work and frustration.