Montana Man Forgets to Sign Documents Before Stealing Bank-Owned Property

A petty crook in Montana tried to steal real estate owned by a bank. He's not much different than many participants in the housing market here in California. His real crime was failing to fill out a mortgage loan application first.

Irvine Home Address … 14541 GUAMA Ave Irvine, CA 92606

Resale Home Price …… $749,000

Somewhere high in the desert near a curtain of blue

A sane man skirts under the wind

But down here in the city of limelights

The fans of Santa Ana are withering

And you can't deny the living is easy

If you never look behind the scenery

Bad Religion — Los Angeles Is Burning

Real estate is religion in California. Home price appreciation is the one area where all Californians share the same faith. Faith in the ability of their fellow man to push prices ever higher. Faith in lenders to provide an endless pool of borrowed money. Faith in lenders not to foreclose when they decide to quit paying their mortgages.

Borrowers everywhere are not paying their mortgages and squatting. These people signed loan documents promising to repay a loan which prompted a bank to buy a house for the borrower and allow them to occupy it. Right now, the borrowers are living in that house, they are not making their promised payments, and the bank is not exercising it's right to call a public auction and force them out.

Historically, squatters have lived in houses they were not paying for just as the delinquent borrowers are doing today. In the past, squatters simply moved in and skipped the step where they sign loan documents and get the bank to buy the house for them. Today's squatters added the participation of the lender, but the end result is the same: people are living in houses they do not own and they are not paying for them either through rent or through repayment of a home loan.

I find it ironic that people who squat with traditional methods are being arrested whereas those who squat with permission of the bank are being assisted by our own government. With a little creativity, one squatter has taken possession of a number of properties, attempted to get HELOC money, and rented one of them out for a positive cashflow — very positive considering he didn't pay for it. Although he is a criminal being prosecuted, he isn't much different than the thousands of California squatters and land barons operating across California. I will let you decide whose theft is more sophisticated.

Man claims ‘Yahweh’ sold him a foreclosed home

Wilson convicted of stealing Montana house by removing ‘for sale’ signs, changing locks

7/14/2010 10:07:16 AM ET

POLSON, Mont. — A Lake County jury convicted a transient of stealing a house in foreclosure by removing "for sale" signs, changing the locks and filing strange paperwork with the county claiming he purchased the house from Yahweh.

Stealing a house by filing strange paperwork? Isn't that what every liar loan applicant did during the housing bubble? People all over California filled out strange paperwork full of half-truths and outright lies about their income. We sold homes to transients and anyone else with a pulse. I'm sure many of those buyers thought it was a gift from God. Why should this guy be jailed for it if we are letting slide all those other people here in California who did the same thing?

Jurors deliberated for less than an hour Tuesday morning before convicting Brent Arthur Wilson of theft, deceptive practices and tampering with public records or information. He faces up to 30 years in prison when he is sentenced Aug. 19.

The professor under whom I first studied real estate law also taught a course at the nearby penitentiary. He relayed the story of one convict who forged the signature of the previous owner on a purchase and sale agreement deeding the property to the criminal, and then the criminal recorded it. For anyone doing a title search, the criminal would have looked like the legal owner because he was present in an unbroken chain of title.

The fool in Montana made the mistake of purchasing the house from Yahweh who did not appear on the chain of title. Perhaps he can argue all property rights come from God, but unless God is on title, He does not own the property.

Wilson was charged in February after Polson real estate agent Ed McCurdy investigated the removal of "for sale" signs from a $380,000 house he was selling on behalf of a lender in August 2009.

Further investigation found Wilson tried to use the house as collateral for a $125,000 loan he sought from a Missoula financial institution.

I love this guy. He buys the home from God and immediate applies for a HELOC. His mistake was doing this in Montana where it stands out as unusual. If he had pulled this trick in California, we would have been viewed as just another homeowner.

Prosecutor Jessica Cole-Hodgkinson told the jury Monday that authorities found journals belonging to Wilson that detailed a plan to steal up to 100 homes in foreclosure.

It would be more accurate to say the guy had plans to acquire 100 homes just like California land barons. He was thinking like a land baron. Many people during the real estate bubble acquired multiple properties using liar loans, 100% financing and Option ARMs. Since these "legal" land barons lied on loan applications, didn't put any of their own money into the deal, didn't make payments that covered the interest on the debt, and walked away when the investment went bad, it is difficult to distinguish the their behavior from the lunatic in Montana. Land Barons did this because they believed prices would go up, and they would get HELOCs to fuel unlimited consumer spending. I don't see where this guy in Montana's thinking is out of the ordinary.

Cole-Hodgkinson asked Lake County sheriff's detective Rick Lenz to read several entries from journals.

"The prospect of claiming and fulfilling my 100-title vision is growing stronger," read one. "Took down one of two Realtor signs," says another entry. "The other needs a tool to dig it up."

Everyone should have such a strong vision of their future. I imagine people forming funds to buy real estate (not that I would know anything about that) have vision boards with hundreds of properties representing their real estate empire. This kind of creative visualization is a powerful tool. This guy should be complimented as a visionary.

Many of the journal entries appear to be addressed to "the creator, Yahweh."

Don't others pray for their dreams to come true? This guy did more than just pray — he took action. He did more than most when presented with a great opportunity. He should be commended as a role model.

"Wow. You surely have blessed me with some wonderful opportunities," Lenz read from the journals, which referred to a property with a "million-dollar value" that "seems to be waiting for me to claim it. Wow on wow."

This guy should have walked around some of the bubble subdivisions in California. There are opportunities everywhere with so many vacant homes, many of which lenders don't keep good track of.

Wilson refused attempts by District Judge Kim Christopher to appoint legal counsel for him. He didn't participate in his trial and offered no defense. He read from an IRS document Monday and was reading the Bible during Tuesday's court session.

Authorities have said they believe Wilson tried to claim ownership of at least two more houses, one he was living in and one he was renting out, but he has not been charged in those cases.

So he purloined a property and rented it out. That is very common here in California among delinquent land barons. There are thousands of properties where a renter is paying a land baron who is not paying their mortgage. As long as the property was owned for more than one year, it isn't classified as rent skimming despite the fact it looks a great deal like theft. With banks refusing to foreclose, renters are undoubtedly aiding theft by land barons everywhere.

A court-ordered mental health evaluation found Wilson fit to stand trial.

There shouldn't be any question about his sanity. If we were to find this man insane, we would have to lock up most of the kool-aid intoxicated fools here in California whose religion is real estate. They are just as insane, just as crooked as this nut in Montana, but we don't think twice about their transgressions.

When you boil this case down to its essence, there is only one difference between this guy who blatantly stole the property from the bank and hundreds of thousands of similar thieves here in California: he didn't sign a loan document. That is really the only difference.

If this Montana man had gone through a loan process and obtained bank approval, he could keep the house he did not pay for just as the plethora of squatters are doing all over the nation. The only real distinction between this insane man and the pitiful masses squatting in their McMansions is the process they went through to obtain the property. At least this guy has the defense of being insane. The masses of squatters are just thieves with no defense. They were calculating and sane — unless you consider kool aid intoxication as a form of mass insanity, and you think their debts should be forgiven.

These people squatted a long time

  • This property was purchased on 5/29/203 for $475,000. The owners used a $322,700 first mortgage, a $100,000 second mortgage, and a $52,300 down payment.
  • On 2/3/2005 they refinanced with a $623,000 first mortgage from Ameriquest.
  • On 3/16/2006 they were given a $100,000 HELOC by Wells Fargo. Since the first and second mortgages were from different lenders, the first mortgage holder had no problem blowing out Wells Fargo — after a long period of squatting.
  • Total squatting time is at least 27 months.

Foreclosure Record

Recording Date: 03/03/2010

Document Type: Notice of Sale

Foreclosure Record

Recording Date: 11/30/2009

Document Type: Notice of Default

Foreclosure Record

Recording Date: 02/19/2009

Document Type: Notice of Rescission

Foreclosure Record

Recording Date: 11/14/2008

Document Type: Notice of Sale

Foreclosure Record

Recording Date: 08/06/2008

Document Type: Notice of Default

This looks like a failed loan modification, so the US taxpayer will end up paying for the loss.

Of course, the taxpayer's loss is a flipper's gain. The house was purchased for $610,500 at auction, and after some renovation work, it is being offered for $749,000. With as ridiculous as the price is, with 4.61% interest rates, the monthly cost of ownership of $2,671 is near rental parity.

Irvine Home Address … 14541 GUAMA Ave Irvine, CA 92606

Resale Home Price … $749,000

Home Purchase Price … $610,500

Home Purchase Date …. 3/23/2010

Net Gain (Loss) ………. $93,560

Percent Change ………. 15.3%

Annual Appreciation … 62.9%

Cost of Ownership


$749,000 ………. Asking Price

$149,800 ………. 20% Down Conventional

4.61% …………… Mortgage Interest Rate

$599,200 ………. 30-Year Mortgage

$148,276 ………. Income Requirement

$3,075 ………. Monthly Mortgage Payment

$649 ………. Property Tax

$0 ………. Special Taxes and Levies (Mello Roos)

$62 ………. Homeowners Insurance

$43 ………. Homeowners Association Fees


$3,830 ………. Monthly Cash Outlays

-$738 ………. Tax Savings (% of Interest and Property Tax)

-$773 ………. Equity Hidden in Payment

$259 ………. Lost Income to Down Payment (net of taxes)

$94 ………. Maintenance and Replacement Reserves


$2,671 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$7,490 ………. Furnishing and Move In @1%

$7,490 ………. Closing Costs @1%

$5,992 ………… Interest Points @1% of Loan

$149,800 ………. Down Payment


$170,772 ………. Total Cash Costs

$40,900 ………… Emergency Cash Reserves


$211,672 ………. Total Savings Needed

Property Details for 14541 GUAMA Ave Irvine, CA 92606


Beds: 4

Baths: 1 full 2 part baths

Home size: 2,327 sq ft

($322 / sq ft)

Lot Size: 5,000 sq ft

Year Built: 1971

Days on Market: 64

Listing Updated: 40338

MLS Number: S616253

Property Type: Single Family, Residential

Community: Walnut

Tract: Cp


Gorgeous remodeled home in College Park. Four bedrooms & one spacious bonus room. Recessed lights throughout. Crown moldings & ceiling fans. Granite countertop & stainless steel appliance. Pre-wired surround sound speakers in family room. Newly-built fireplace with BBQ in the backyard. Within walking distance of school & park.

Flip with moderate profits… maybe

The renovation on this property looks extensive. After they lower the price to sell it and pay commissions and renovation costs, the flipper will likely make 6%-8% on the deal. Not bad, but not great. It doesn't look like they will get their asking price as it has been active for over 60 days without a price reduction.

IMO, they overpaid at auction. The opening bid was $510,000, and it was bid up $100,500. With comps closer to $710,000, it shouldn't have been bid up quite so high. The flipper as probably expecting a massive spring rally to make an extra 5%. It isn't happening for him.

60 thoughts on “Montana Man Forgets to Sign Documents Before Stealing Bank-Owned Property

  1. Swiller

    Yes, this HOMELESS guy did bad things, but let’s focus on the ones that don’t have jack sh1t, and not put the focus on where it belongs….the banksters.

    The banksters controlled everything from the beginning and they “lent” money to anyone who could fog a glass….and they were backed and blessed by our government. Throw me up some pictures of say someone like…CHRISTOPHER COX, and that man is much more of a dirtbag in need of being jailed than this homeless guy. In fact, I would be happy seeing a large portion of our “elected” congress simply thrown in chains, the central banking system banned, and a 90%+ tax rate on the extremely wealthy like there was in the 1940’s-60’s….possibly the best time to live in the U.S.

    1. AZDavidPhx

      The MountainMan’s folly was in not having a lobbyist presence in Washington D.C to bend the laws that would make his scheme technically legal. He should have worked for a bank so that he would have been protected and earned bonuses at the same time. If you are going to defraud the citizens of this country, you better damn well make the government a partner and cut them a piece of the action otherwise expect to pay a hefty price.

    2. Freetrader2

      Yeah, Swiller, and over 100,000 American troops died in the Vietnam and Korean Wars, you had the Kennedy and MLK assassinations, Altamont, domestic teorrorism, plus 90% tax rates! Yup, great times. Or did you forget your meds today?

      1. Swiller

        Kennedy was assassinated because he tried to wrest control from the Federal Reserve. It was, and will be the last time a president attempts to revert back to the Constitution in regards to our monetary policy. Anyone still have any silver certificates?

        And with a name like “freetrader”, what would I expect from you? Unrestrained capitalism is evil…pure and simple. It victimizes those whom can LEAST afford to purchase, and gives the greatest benefit to those whom already have wealth. It is inherently tipped to always amass more for those whom already have. That’s why we need regulation from government to control OUR interests.

        It’s all about balance. Capitalism…socialism, each have their place and each are needed in this country. The wealthy have used the “socialism” scare in order to herd the masses into the behavior that benefits them. If you hate socialism so much, I’m sure freetrader and the others will refuse to collect Social Security…or use our highways, or use our airlines, or listen to TV and radio…the list goes on.

        From my experience in life, the wealthy people are primarily greedy, self centered, and not concerned with societal problems as long as they bask in the life of luxury.

        People whine about 90% tax rates because for the hamster wheel public, 90% would mean we couldn’t survive. Now, take 90% of $100 million and I’m still left with $10 million, GOOD LORD who would work for such a paltry amount?

        Gotta think outside the box…especially the box that imprison so many in order to have the “american dream”.

        And freetrader, I can’t take my meds, our government has made it LAW that it would be a felony for my to use the medicine of my choice. Go figure…what was that Thomas Jefferson quote?

        “If the people let government decide what foods they eat and what medicines they take, their bodies will soon be in as sorry a state as are the souls of those who live under tyranny.” – Thomas Jefferson

        I don’t think you will find a bigger advocate of freedom than I.

        1. Perspective

          Who are the “extremely wealthy”? Is it defined by income or net worth? A 90% tax rate is ridiculous, regardless of what’s being taxed.

        2. zubs

          If I were making 100,000,000 dollars and the Fed, State, SS, medicare took 90,000,000 of it, then I would make sure I didn’t make 100,000,000. I would just have my company pay for everything and call it company expenses.

          Private jets, boats, boxes at the stadium, etc. All company paid expenses.

          1. zubs

            Furthermore, my company would be located in Dubai. Like Haliburton, so I could more easily not pay federal and state taxes.

  2. Planet Reality

    The banks have no interest in selling houses at rental parity. They would rather sell to a wealthy 100% cash buyer for 20-40% below rental parity. Why should they care? The tax payer has already picked up the loss and the wealthy make a direct profit from the tax payer. What’s more is the wealthy 100% cash buyer sales the house to someone using a government backed loan. If and when those loans default the tax payer can pick up the tab again.

    This works well in premium areas like Irvine. Desire is not demand, 100% cash buyers flipping to 20% cash buyers is demand.

    1. tenmagnet

      Excellent point, definitely seems to be the case.
      Today’s owner also picked up 14902 Elm Ave. in May for $625K
      These guys are all over it trying to meet the demand

    2. AZDavidPhx

      PR –

      While I don’t entirely disagree with your point, I do believe that you are bullishly exaggerating the easy profits. For one, we are not privy to the conditions of these houses that are being picked up for less than FMV. I still find it very hard to believe that a bank will allow a perfectly fine house to go at auction for a significant discount like that. What seems likely is that these houses are in need of significant work that the banks do not want to deal with so they toss it to the flipper at a discount.

      I would assume that the flipper will be made to fix everything after the inspection is completetd by the 20% buyer.

      I would also assume that these flippers pay capital gains taxes right back to the government.

      Not that they are not making a profit, but I doubt that it is as glorious as you sensationalize.

  3. Sue in Irvine

    I wonder how many of your readers are squatters :question:

    Personally, I’m not. We’ve paid our mortgage every month since 1993. And we haven’t taken out a HELOC.

  4. IrvineGuy

    If squatting is as easy as this blog makes it sound, why doesn’t everyone do it? By everyone I don’t mean the current significant portion of borrowers who are squatting but rather 100% of borrowers.

    1. IrvineRenter

      That is what lenders are worried about. It is that easy right now. Once people decide to quit paying, rather than being pushed out in 7 months, enduring 5 years with no possibility of getting a new home loan, and having the bank go after their assets, the home owner who defaults today will get at least 15 months of squatting (more if they game the system), they will only need to wait two years to get a new home loan, and nobody seems to be going after the bad debt. Many people are choosing to quit paying and squat. That is why the banks are freaking out about strategic default. They created their own moral hazard.

    2. AZDavidPhx

      So what is your point? Squattin ain eesay because 100% of borrowers are not doing it?

      Squatting is definitely easy once you are hopelessly underwater and banks are prone to ignore it.

      Which is why all the people who are doing it have either purchased with 100% financing or they have tapped the house’s ATM for all it’s worth. Either way, squatters have no skin in the game and nothing left to lose so far as FICO scores are concerned.

      The rest either:
      1) Have equity
      2) Make believe they have equity
      3) Are praying for future equity
      4) Bought another cheaper place and bailed
      5) Jingle mailed

      The honorable ones will jingle mail and take their licks. The dishonorable ones game the system and squat.

      1. Partyboy

        Jingle mail is not as easy as you think. Try calling the bank if they will agree to a deed in lieu (same as jingle mail I believe). They will not agree to it. You can’t relieve yourself of liability in the house just by mailing in the keys and moving out. There is more accountability relating to a house than simply paying the mortgage.

        1. AZDavidPhx

          Of course you can drop the keys in the mail and call it a day. The bank does not have to agree to let you default.. Either way, whether you squat or jingle mail – your ass is being foreclosed. You can go the honorable route by sending back the keys and vacating promptly or you can squat and play games with the system.

          I don’t have much quarrel with jingle mailers, but the squatters are lowlifes as far as I am concerned.

          1. lowrydr310

            Lowlifes who aren’t paying rent, unlike you and I…

            Squatters are just playing the game, the same game that enabled them to get the house that they’re squatting in.

            I say let ’em go – we need more of them to overwhelm the banks so they can realize the extent of their problem.

          2. AZDavidPhx

            Well the fact that the banks ignore them for so long shows us that they do in fact understand the extent of the problem and their solution is to bury their heads in the sand.

            The foreclosure party has been going on now for 3 freakin years – these banks should be cranking them out like hotcakes at this point – we should have the most efficient foreclosure system in the world by now.

            Yet here we see, day after day, another squatter who hasn’t made a single payment in a year and continues to crap in a nice house that some more worthier member of society should be crapping in.

            It’s ridiculous.

          3. Partyboy

            Mailing in the keys is only half the deal. If the bank does not take back ownership of the house, you still “own” it. This means you are still responsible for all fees/fines assessed to the house. This was (and probably still is) happening in Detroit where people were leaving the house and mailing in the keys only to find out that the bank never officially took the house back. The “owner” was then on the hook for all sorts of fines. This is why mailing in the keys makes no sense at all, even though it would be a more honorable thing to do.

          4. AZDavidPhx

            This may be true, but you cannot squeeze blood from a turnip. If you are hosed on a mortgage to the point that a default is in your best financial interest – some “fees” that are tacked on after the fact because the bank did not “officially” take possession is chump change. Squatting in the house is not going to make a difference either way.

            What is your argument? Mailing keys results in additional fines? Fines that would not have been levied had the borrower just squatted?

          5. Partyboy

            Yes, mailing in the keys can cause fines which would not have been accrued if the borrower squats. I am assuming that a squatter is actually mowing the lawn, removing weeds, picking up trash in the yard, etc. If someone leaves the house then none of this is happening and as long as the borrower still actively “owns” the house then they are the liable party. In the IE where I live, people who are squatting do still maintain the yard and keep the place clean to some degree. It is amazing how fast a place deteriorates without some there. Perhaps this is why the banks allow squatting for so long, a “free” yard maintainer.

          6. AZDavidPhx

            I’m not convinced that this is justification for squatting – that they are outside with the toothbrush scrubbing every nook and cranny as foreclosure stares them in the face. If anything, the squatters have every reason to not maintain the premises. Why waste their time if they will soon be out?

            The fact that the bank stalls to officially acquire the house on paper is no justification to stop payment and squat for a year.

          7. Swiller

            Indeed, just because you do the “honorable” (sic) thing, it doesn’t mean the SYSTEM will honor it. In In fact, you are still liable for any damages, any liability, and the house sits vacant, but yea, do the “honorable” thing and GTFO without planning or even money.

          8. AZDavidPhx

            Swiller is right – let’s just give all the squatters a free house. The “banksters” screwed them!

      2. IrvineGuy

        No, my point is not that it isn’t easy but rather what is preventing or rather why are people choosing to not squat.

        In your comment above you said its easy once someone is hopelessly underwater. I would argue that its easy if a borrower is just slightly underwater. My question is geared more towards what is stopping people (ethics, post-squating debt collection, ruined credit, etc) from squatting if it really is this easy.

        It makes sense for borrowers to squat with what seems like minimal consquences for squatting. While this isn’t something I would personally encourage, I don’t understand why 100% of underwater borrowers are not squatting. Maybe this is stemming from my belief that people will act in a self-interested way to the extent that the benefit out-weighs the consequence.

        For example, most people driving on the 405 highway in Orange County exceed the speed limit when traffic permits. In self interest, these people will reach their destination in less time than if they followed the speed limit. The likelihood that people will get ticketed, unless grossly exceeding the speed limit, is also low. I’ve routinely have observed people exceeding the speed limit directly next to a California Highway Patrol car and not get a ticket. Even if the person does get a ticket, the ticket is similar to a fee for being able to get to their destination faster for all the other times they didn’t get a ticket.

        So coming back to squatting, if the consequence is just not being able being able to buy a house for two years, how is every underwater borrower not squatting?

        Dunno, maybe I’m bias because IHB seems to focus more on the squatter type of underwater borrower rather than the borrower that gets forclosed on and then their other assets taken away to cover the short between the funds received from the forclosure sale and the balance of the old loan.

        To sum up it would be interesting to see some statistics on how often the borrowers are held accountable for the the loans they’ve signed up for. Held accountable such that the borrower’s net assets are reduced to the extent that covers the the difference or reduced to zero net assets. I dont even know if this is possible with the bankruptcy laws we have in place.

        Similarly, it would be interesting to get statistics on the average amount of time squatters are being allowed to squat in a home before a meaningful consequence occurs.

        1. AZDavidPhx

          The reason that people squat is the exact same reason that they jingle mail – significant negative equity. The government and the bankers are no fools and understand this very clearly. It is the reason that they are throwing everything and the kitchen sink at propping up the housing market because they know very well that once the borrower is significantly underwater a default on their slavery pledge to the bank is soon to follow. The banks are not designed to handle these kinds of losses.

          I would say that if you are underwater say 50K, it is probably not worth the hassel of defaulting. Above that is questionable and 100K and up – Just Slip out the back, Jack you are EFF’d. Each time prices drop 10% we steer that many more debtors into the danger zone.

        2. IrvineRenter

          The main reason 100% of people are not squatting is that eventually, they will have to pay the piper. Most people won’t take two years of free housing if they have to move out of their family home. If the squatting were permanent, 100% of people would quit paying their mortgage because lenders would be giving away free houses.

          I tend to focus on the squatters that are still in the homes because that is all I have to work with. Unless someone wants to email me and tell me about how the bank took everything, I have no way to follow up. Most borrowers who go through short sale or foreclosure end up broke, but most had a negative net worth to begin with because they live like Ponzis. Most often there are no assets for the banks to go after.

          In the short term, few of the squatters are being held accountable, but over the long term, I imagine many of them will have to declare bankruptcy or deal with zombie debt collectors coming after them. It isn’t over when they finally move out.

          1. Planet Reality

            Don’t forget that a poor credit score will impact their ability to find employment both high paying and low paying. There is no reason to be jealous or frustrated by these people. They are making a choice within their legal rights and it does have some consequences.

          2. AZDavidPhx

            Don’t forget that a poor credit score will impact their ability to find employment both high paying and low paying.

            Unlikely. A poor credit score because of a foreclosure can be easily explained away now that 25% of Americans Have Low Credit Scores. As long as you have a half-ass excuse a foreclosure doesn’t mean diddly unless you are applying for a mortgage.

          3. Planet Reality

            Most companies would never hire someone without looking at their credit score first.

          4. AZDavidPhx

            So? Looking at a credit score doesn’t mean you are somehow ruled out just based upon the score.

            Hell, even the government will grant you a Top Secret Security Clearance with a foreclosure on your record.

            You think that your average company is going to have higher standards than the Department of Defense? PFFFF

          5. Planet Reality

            I have seen people ruled out on more than one occasion, and yes talent in the public sector is lower quality.

    3. tony

      The vast majority of homeowners don’t squat because we have too much equity.

      Imagine this:

      Homeowner A, mortgage of 400K, home valued at 800K with current comps.

      Homeowner B, mortgage of 1.2M, home valued at 800K with current comps.

      I’ll betcha that if B stops paying the mortgage the bank will let him squat.

      BUT, if A stops paying the mortgage, the bank will foreclose in 60 days and get their money back.

      That’s why 100% of borrowers dont’ squat.

  5. Partyboy

    I am curious what the readers of this blog consistute as squatting. Is it continuing to live in the house after missing one mortgage payment? 6 payments? 12 payments? Until someone is actually foreclosed on, they are still liable for what happens to the house. If there are fines for unkept yards, the owner is liable for these until they have been officially foreclosed on. If they leave the house and someone breaks in and injures themselves, the “owner” is still liable.

    In a similar line of thought, is someone who pays their property taxes twice a year instead of monthly a tax squatter? If Lindsey Lohan doesn’t report to prison until the day she is order to report, is she a freedom squatter? It seems to me that the hate in this blog directed a squatters is hypocritical and unfounded at best. Not that the anger is not justified, just misdirected.

    1. winstongator

      If you have no intention of getting current with your mortgage, you should mail the keys to the bank, transfer back the deed of the home and move to a rental. The squatting is referring to people who have no intention of getting back to current, not people who are temporarily missing payments.

      27 payments is a whole lot different than 6. If you’ve been 6 months w/no payments, it’s very likely you are not intending to make any more payments. You might tell the bank different to get into a modification program, or make a payment here or there to get a modification going to postpone actual foreclosure.

      The point is that the longer it takes to foreclose, the more problems are caused. People who can actually afford the home can’t move in, banks aren’t paid, and you are encouraging people to engage in this behavior.

      And the analogy is that if Lohan doesn’t report to jail when she is scheduled to, she IS a freedom squatter and WILL be picked up by cops if they find her. If she jets off to Switzerland ala Polanski, she would be rightly torched as a fugitive.

      1. Partyboy

        I wasn’t saying that Lohan does not report to jail on time. I’m saying that since she knows she has to go on a certain date, isn’t that the same as squatting? People who don’t pay on their house know that they have to leave on a certain date and if they don’t leave immediately they are labeled as squatters. I fail to see why one is worse than the other. As far as people trying to game the system by applying for a mod to extend their time in the house, this is really no different than someone appealing a court decision when they know they are guilty just to delay their sentence.

        1. AZDavidPhx

          It’s not the same thing. Squatters who have defaulted on their mortgages are not in the same position as someone who has been ordered to report to jail. False comparison.

        2. winstongator

          The squatter is required to pay on a certain date, which they are continuously not complying with. If you look at foreclosure reports, they list on the total owed back interest. By delaying their move-out date, they are accumulating additional debt obligations that they have no intention of repaying.

          The other issue is that Lohan will serve her time in jail, whenever she starts, and if she missed her report date, she’d do more time. The squatter will NOT repay the debt they’re accumulating (most of the time at least – I haven’t heard of deficiency judgments happening very often).

    2. winstongator

      It also appears that this home would have been auctioned > 1 yr ago without the occupant actively pursuing an extension. Obviously that extension didn’t work out, and possibly the occupant never intended to try to make it work.

    3. AZDavidPhx

      A squatter is somebody who knows that they are going to be foreclosed, defaults, and continues to live in the house until forced out by the Sheriff. The point is to live rent free for as long as possible.

      It’s a simple definition and easy to understand why they get the brunt of the anger – the neighbors are making their payments, the renters are making their payments. The squatter is an individual who has decided that honorable conduct does not apply to their situation. Surely, they know what they are doing is wrong because they have breeched a contract but they stroke themselves into thinking it is ok by blaming the lender (make a victim out of themselves).

      Your tax squatter and “freedom squatter” examples are ridiculous and have nothing at all in common with mortgage default.

      1. Partyboy

        I disagree. “A squatter is somebody who knows that they are going to be foreclosed, defaults, and continues to live in the house until forced out by the Sheriff.” If this is your definition of a squatter, someone who doesn’t leave until they have to, then someone who doesn’t report to prison until they have to is doing the same thing. I see no logical reason for someone to move to a worse situation before they have to. I agree that it is more honorable, but again you are upset at the rules and taking it out on the players.

        1. AZDavidPhx

          I was only pointing out that the squatters were taking the less honorable option than jingle mailing. So we agree.

          As someone who pays rent on time each month and for the past 3 years – I would be evicted a hell of a lot faster than a year if I defaulted on my rent obligation and the landlord would not be crying me a river if I lost my job nor would the government get me into some taxpayer backed slush fund to keep me in my rental.

          So yes, watching the squatters game the system and live in a nice house rather than jingle mail and move into a smaller rental is irritating to no end.

          1. Planet Reality

            If the bank never foreclosed technically they are not squatting. Legally they can still live there. Legally they can lease out the house and collect rent. They still technically own the house even if they aren’t making payments until the bank forecloses. It’s the bank who is squatting on the foreclosure process.

          2. Partyboy

            This is my point exactly. People are being prematurely labeled as squatters. Direct anger and frustrations where they belong…at the banks.

          3. Planet Reality

            The term squatting is used incorrectly by most here.

            The definition of squatting is to settle a land or property without legal claim.

            When a home owner stops making payments they still have legal claim until the bank forecloses. They still own the house and therefore they are not squatting. It would only be squatting if somebody lived in the house after foreclosure and the bank owned the house.

          4. AZDavidPhx

            We all know the real meaning of squatting, PR. It’s used on the blogs perjoratively as slang – pull your head out of your ass. What they are doing is no different than scammers who sign a rental agreement and then pay no rent and drag out the eviction process as long as possible.

            And yes, the banks are totally allowing the squatters to game the system. Note that nobody has made any types of claims that they are doing anything illegal by squatting. It may not be illegal, but that does not make it fine and dandy to someone who pays on time each month.

          5. AZDavidPhx

            PartyBoy –

            Why does all frustration have to aimed at the bank? Is it some kind of all or nothing thing? We can look at the scenario and see bad behavior on both the bank and the squatter.

            I am all for burning these bankers at the stake, but that doesn’t mean Mr. Irresponsible Borrower is entitled to a free ride of some kind.

          6. AZDavidPhx

            PR –

            Nobody is contesting that somewhere a piece of paper exists with a little line that says “Owner” with the debtor’s name scribbled on top.

            We are just pointing out that they are gaming the system to stretch out the foreclosure process rather than mail the keys back and get out so a deserving buyer can get in. We all understand the technicalities that allow them to get away with it but that doesn’t make it fine and dandy.

          7. Planet Reality

            I’m thankful not to be in their position but you would be stupid not to live in a home you legally own if the bank allowed you.

          8. Partyboy

            The reason I think the bank is more to blame is because they are really the ones in control of the situation. It is not up to the borrower how soon they have to leave the house. It is completely up to the bank. The fact of the matter is that the banks don’t want their balance sheets to reflect reality. The timeline for eviction is completely dependent on the banks willingness to act on the defaulting borrower. It seems to me that the reason so many people are upset at the borrowers is because they have so much time in the house without making a payment. I understand that, but they are only able to do this because the banks allow them to. I agree with PR’s comment below, you would be stupid to leave voluntarily if the bank allowed you to stay for no money.

            Now in situations where the borrower is trying to use every delay tactic known to man to stay in the house even longer, I agree with you. But for standard defaults (the borrower stops paying and just waits for the foreclosure) where the bank is just dragging their heels, I don’t blame the borrowers one bit for staying as long as they can. You’d be stupid not to.

          9. IrvineRenter

            Planet Reality is right. Legally, these people do not fit the definition of squatting, and they do own the home. They can rent it out or exercise any legal right of the owner.

          10. winstongator

            What if the banks started going after people for the time they don’t make payments? If you knew that you were going to have to repay the money the bank was losing those months, would it still be stupid not to live there?

        2. winstongator

          This is not the same because the squatter is accumulating more debt, that will most likely never be paid. The person reporting to jail will do the same time no matter when they show up (at least before required).

  6. E

    The banks aren’t letting the squatters “game the system”.

    The banks are giving the squatters enough rope to hang themselves…again.

    How many properties has IrvineRenter profiled where there is only a non-recourse purchase money mortgage? I’m betting probably not many. The squatters may think that they’re getting off scot free…but really…they’re not very bright. If they were…would they have borrowed so much in the first place?

    I’d be willing to bet that the banks are letting high wage earners (Doctors, Lawyers, Indian Chiefs) run up the tab…but the bank will get their pound of flesh in the end.

  7. Cosmo Kramer

    I think you’re all missing the point. THEY LET THE UNABOMBER OUT OF JAIL. What’s up with that?

  8. mike23w

    Home Sellers Slashing Prices, While Banks Mow the Lawn[/url]

    [quote]Of course they do, but in Los Angeles at least, they’re getting a big incentive to dump it fast. L.A. last week passed a new city ordinance that fines banks, servicers, whoever owns the foreclosed property, up to $100,000 for letting the property fall into disrepair. We’ve heard and seen plenty of stories about run-down, stripped homes littering the landscape, with their overgrown lawns and broken front fences standing as glaring examples of what is not recovering in the housing market. [/quote]

  9. Neil

    I looked up Zillow for the Home Purchase Date …. 3/23/2010, but could not find it. Could it have been the Bank buying back the property at a Sheriff’s auction? Comparable homes are selling for 650K as per Zillow. The very fact that this property was sold at 475K in 2003 and is still able to command a price of 600K – 650K is proof of the strong Irvine housing market I would say. Prices at Other not so desirable areas have gone back to their 2000 levels actually.

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