Richard Davet, an Ohio native, was able to stall the foreclosure process for 11 years without making a mortgage payment, according to a recent article in The Wall Street Journal. How is this possible? Davet used various legal strategies to accomplish this feat, filling appeal after appeal and trying to expose loopholes in the system. His efforts made for quite the legal display, but he finally succumbed to the law and was removed from the house by the sheriff. Although he no longer lives in the house, he is still fighting to get his house back. You can read the article for more details on the efforts he was making.
After reading the article, the thought kept coming to my head was that, if this guy spent all that energy on something that could actually make him money, he could have afforded to pay his mortgage and none of this would have happened. He would still have his house, and a nice chunk of equity, making him better off. In addition, the bank would have saved a ton of money on legal fees, allowing them to loan that money to someone else, furthering the economy and so on.
I hope this story doesn’t inspire other people facing foreclosure to follow suit. Not only could such an attempt ultimately be bad for them, it would further harm banks, making life harder for people trying to get home loans. That, in turn, could lead to further punishment of the real estate market and of the economy overall.
3 comments:
Right. Because what he did was the real reason why the real estate market plummated. All because of the selfishness of one man.
I applaud him for being able to stay in his house for 11 years. There could have been a litany of reasons as to why he made finding loopholes in the legal system his full time job; physical handicap, poverty, unemployment...the list goes on.
It is the fault of the banks and lending companies of being so greedy that they would give sub-prime loans to people who couldn't afford them in the first place. They knew that just from the interest alone from the loans could make billions for them, never thinking of what that kind of lending would do in the long run. If anything, we can learn from this man, especially now in our economic situation. People who are losing their houses should discover what legal loop-holes this guy found and use them to live in their own houses for free to punish the greedy banks and lending companies.
If that man can live in his house for 11 years during good economic times, than who's to say that someone whose house is in foreclosure now, can't live in their house for 20 years? It's definitely worth a try.
I applaud him as well. Our loan is with wells fargo, it is interest only and will adjust. Our home value has fallen by over 50%, and we are about $400k underwater on our home. When the loan adjusts, we will have no refinance options, and no sale options.
We contacted wells fargo before we were late (we had over 800 credit scores) and asked them to simply put our loan on a 30 or 40 year fixed amortized term. We did not ask for lower interest rate, nor did we require a principal reduction.
They refused to offer us a modification. They told us many things, we make too much money was one of them! Another is that we don't fit investor guidelines. Well, after 9 months of asking who the investor was, and being told various things, we wrote and asked. The investor was WFB..., basically wells fargo!
We chose to stop paying our mortgage, and are in foreclosure now. We would have been happy to continue paying on a fixed rate, but for a payment to jump by over $2,000 right when our kids were due to enter high school, we would have lost the house then.
We made a business decision to walk away now rather than later, as are many other folks. Almost 50% of homes in California are underwater, and the banks have the backing of the governement, so they know they will not ultimately fail.
If this was a small business owner instead of the large and great wells fargo, a sound business decision surely would have been made to protect the huge loss they are going to take. Instead, the hundreds of thousands of dollars they are going to lose on our home is just a drop in the bucket to them, so they don't care.
The nation is made up of taxpayers, when the next wave of foreclosures hits, we will be there to bail the banks out again.
It is for this reason that I will also work to stay in my home as long as possible. Wells fargo is a business that is too large to fail, yet they do not make common sense business decisions. Good luck to everyone else in this situation!
We should never walk out on our loan obligations to a bank. The bank of course has every right to walk out on any loan obligations they have and then collect a check from the government to cover themselves. We the consumers who were dumb enough to buy a house as the market topped and are now without work and burning up the last of our life savings are responsible for our economy not the banks who loaned money to people they knew could not afford to pay it back which then collapsed the housing market into which I can now not sell my home for anything near the amount of the mortgage. I know this article was written in 2009 but I am sick and tired of listening to the stories about banks and the money they make on foreclosed homes. My house is upside down by 50,000 dollars and Wells Fargo will not deal with to help me try and keep my home. The local real estate agents do not want to list my home for a short sale because I still have PMI on it and they know that Wells Fargo will not deal with them. I too applaud the guy, I think everybody in the United States that owns a home that has been affected by the drop in real estate prices should stop paying their mortgages and wipe the big banks out once and for all...oh wait O'bama will bail them....again.
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