Can I Gut the House Before the Bank Forecloses?
I am getting a lot of people asking me if they can gut the property, sell off everything for extra cash before the foreclosure sale. I will say this- yes, you CAN, if you want to be sued &/or thrown in jail. I promise you, the Bank has a lot more money to spend on Attorney’s than you do.
Many people want to sell the cabinets, doors, toilets, counter tops, etc to make some extra cash when they’re leaving. Here’s the problem with that- that is destroying the Bank’s collateral. They agreed to loan you money based off of the property’s current condition- and yes, they read the inspection report you got before they loan you the money. By taking that stuff out, you are essentially destroying their property value/collateral, and they CAN and WILL come after you later. They can sue you (and in some cases, find that you performed criminal activity and have you arrested), get a deficiency judgment against you, and garnish your wages until they recoup their losses. It’s not a pretty site to try to make a little bit of money. Contrary to popular belief, the bank owns your house until the day you pay off the mortgage (same with your car, for that matter). Yes, you may have TITLE to the house- but the banks OWN the house.
Here’s what I tell my clients- IF you are walking away, you can typically take your refrigerator (if it’s one you put in after you purchased- if it came with the home, LEAVE IT!) and washer/dryer. You cannot take: Stove, Dishwasher, Cabinets, Counters, Toilets, Sinks, etc. Do not trash the property when you leave, that is just a horrible statement of your integrity. Afterall, while you may be mad at the bank, you’re the one you agreed to make the payments and are breaking your agreement (in most cases). Leave the property in decent condition, take your personal belongings with you, and part your ways peacefully.
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September 13th, 2008 at 7:59 pm
What are my rights as a tenant in a home that is being foreclosed, which I found out when the court document of date of auction was placed on my door? Pease help!