Wednesday, July 25, 2007

Two ways to not build a community

Our neighborhood is changing. A number of homes are undergoing major renovations that will double their sizes, and new homes are being built that are much larger than existing homes in the community. . ..

The building boom began across the street early in the spring. Our neighbor started an addition, doubling the size of his home. Then another home, one of the smallest in our neighborhood -- a tiny two-bedroom, situated on a 100 ft. by 100 ft. lot -- was purchased for $285,000 and quickly razed by a building company. A three story, five-bedroom "castle" is taking its place -- complete with spire. As summer began, our next-door neighbors' contractor began adding a third floor to their home. Up the block, three large five-bedroom homes have sprung up on a lot where neighborhood kids used to play baseball. ($ - sub. req'd)

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Funny, that's from the Wall St. Journal's fiscal fitness columnist, who lives in New Jersey. We have the 8-bathroom Richerbyalongfuckthanthousistan specials here in Florida as well. But there's more to the sub-prime world of Florida real estate. This evening a neighbor tells me that a house across the street from her has been abandoned. It's a modest three BR with a pool, not a McManse on the Bay. The people who bought it (for $330,000) got a "silent" second mortgage from the former owner. It seems they also got a nice home equity loan once they closed, because they instantly went out and bought a shiteload of Things - electronics, toys, a trampolene.

The Things are still there. The former owner is out his $65,000 second mortgage. The "homeowners" left a couple of months ago, after which the house sat there for a month before the neighbor, overcome by curiosity, found the back door wide open, the nice new Things, the AC running at 73 degrees, the pool a smooth and fecund lime green.

The bank -- whoever that might be -- seems not to know it is the proud owner of the house -- no one has been out to do anything, according to the neighbor. Anyone could walk in, take what they want. The neighbor took me to see the trampolene this evening, then began disassembling it before my eyes.

A fellow we know is thriving in the business of cleaning out foreclosed-upon homes. He's done a number of them around the state, finding shiny new stuff in many. As the banks tend to have no interest in Things, he either gives them away or, more often, trashes them.

Even thieves are not working right now, it seems.

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2 Comments:

Blogger Scruggs said...

The bank may really not know. The mortgage has likely been bundled, sold, borrowed against as an asset and then resold. If it still, somehow, resides on a balance sheet they have to care about, whatever connection exists is so attenuated that it's possible doing something would be more costly than continuing to value it on mark to model and hoping someone comes along to make it all better.

7/26/2007 4:10 AM  
Anonymous tom said...

Sounds kind of faith-based. Hope they're brushing up on their prayers.

7/26/2007 12:42 PM  

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