Forum Thread

Foreclosure Alternative.

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  • Are you sure you want to delete this post?
        
    Home mortgages are still a problem. What about raffling the houses for the money due. Some owners would get some money back but in all cases mortgages would be satisfied . Base raffle price on note plus 20% to service cost of program. Put safeguards in by appropriate authority to prevent abuse established . Non profit . ????
  • Liberal Democrat
    Democrat
    Kenosha, WI
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    They already have something similar to that. It's called foreclosure, when people don't pay their mortgages, their homes are taken back by the bank or mortgage company and resold for whatever they can get for them. I've seen some foreclosed homes, the previous owners who were kicked out damaged their own homes by breaking glass, punching holes in walls, deliberately flooding the basements, yanking wiring and plumbing from inside the walls, just basically destroying their own homes. Banks are then forced to liquidate or sell the properties for whatever they can get out of them.

    My spouse's boss last year bought a foreclosure for $34K, did the necessary/required repairs according to building codes, a $14K investment, and resold the repaired foreclosure for $65K.

  • Are you sure you want to delete this post?
        

    The destruction to homes is probably inevitable due to the circumstances leading up to foreclosure. Raffling based on the liability value of the home including taxes "would pay the note including seconds and possibly some money for the debtor. But those are details. I think raffling would turn an overall loss into a neutral solution. Foreclosure looks to the debtor for any shortfall but the debtor usually enters the foreclosure in a negative financial position.

  • Independent
    California
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    So if I understand the proposal, it's like a lottery. You buy a ticket for, say, $1, and if your ticket gets drawn, you win the house.

    Hmm. It might work. It's impossible to get a rational individual to pay 400k for a house whose market value has dropped to 200k. But it might be possible to get 400,000 people to pay a dollar each and thus pay off the debt. The condition of the property would influence the number of tickets bought, and the owners would get any surplus, so they would have an incentive not to trash the place.

    The trick would be the marketing. In the past, it would be difficult to cover the advertising required to get 400K people interested. But with the internet... if there were an easy "ebay" style system where people could buy a ticket with a click...

    This might be your big idea Chet.

  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    What about the people who live in the house you're willing to raffle off? As Dock said - isn't that what we already have when it comes to foreclosures? The owner gets kicked out and new people bid to purchase the house as cheap as possible. How does that help the family who was just kicked out of their house?

    Dock's pictures expose the other problem with your proposal - people who have nothing to lose may resort to trashing the house they are getting kicked out of just to spite the bank who took it over. That not only drives down the value of that specific house, but the value of the houses surrounding it because property values (and taxes) are based off of neighborhoods and zip codes and not specific properties.

    There are plenty of ways to help people who are going into foreclosure, but a raffle system to give their house to the highest bidder isn't one of them.

  • Liberal Democrat
    Democrat
    Kenosha, WI
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    I will add that homeowners who are behind or delinquent in making their mortgage payments may also be in arrears with their property taxes. In my past experiences, when I first purchased a home, PITI were included in the mortgage payment. PITI means Principal, Interest, Taxes and Insurance. When the opportunity came around for me to refinance, Taxes and Insurance were not included or rolled into my monthly mortgage payments. This meant that if I went into default with my mortgage payment, I would probably have been behind on my property tax payments, and if that were the case, the county would confiscate the property and sell it at a public auction to the highest bidder for the back taxes owed. Now, some counties will set a minimum bid amount for a property auction, which sometimes, not always settle the principal amount the bank or lending institution is owed.

    Homeowners who are behind in their payments are always, always urged to contact their mortgage lender, to try to avoid the lender from repossessing your home. It's been said that the bank or lending institution does not want to take your home from you, and that is true, they would rather come to some kind of an agreement with the homeowner.

  • Are you sure you want to delete this post?
        
    jaredsxtn Wrote:

    What about the people who live in the house you're willing to raffle off? As Dock said - isn't that what we already have when it comes to foreclosures? The owner gets kicked out and new people bid to purchase the house as cheap as possible. How does that help the family who was just kicked out of their house?

    Dock's pictures expose the other problem with your proposal - people who have nothing to lose may resort to trashing the house they are getting kicked out of just to spite the bank who took it over. That not only drives down the value of that specific house, but the value of the houses surrounding it because property values (and taxes) are based off of neighborhoods and zip codes and not specific properties.

    There are plenty of ways to help people who are going into foreclosure, but a raffle system to give their house to the highest bidder isn't one of them.

    People that live in a house facing foreclosure would be far better off in having their house sold for them in a lottery because they could avoid the liability of thePeople that live in a house facing foreclosure would be far better off keeping their house in good shape for having their house sold for them in a lottery because they could avoid the liability of the balance due after a foreclosure sale , avoid bankruptcy , possibly getting money back after the sale , selling tickets for $10 gives far better odds than any state lottery due after a foreclosure sale , avoid bankruptcy , possibly getting money back after the sale , selling tickets for $10 gives far better odds than any state lottery. So far from the responses I see no advantage losing a house to foreclosure over losing a house to lottery sale.
  • Liberal Democrat
    Democrat
    Kenosha, WI
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    Chet Ruminski Wrote:
    jaredsxtn Wrote:

    What about the people who live in the house you're willing to raffle off? As Dock said - isn't that what we already have when it comes to foreclosures? The owner gets kicked out and new people bid to purchase the house as cheap as possible. How does that help the family who was just kicked out of their house?

    Dock's pictures expose the other problem with your proposal - people who have nothing to lose may resort to trashing the house they are getting kicked out of just to spite the bank who took it over. That not only drives down the value of that specific house, but the value of the houses surrounding it because property values (and taxes) are based off of neighborhoods and zip codes and not specific properties.

    There are plenty of ways to help people who are going into foreclosure, but a raffle system to give their house to the highest bidder isn't one of them.

    People that live in a house facing foreclosure would be far better off in having their house sold for them in a lottery because they could avoid the liability of thePeople that live in a house facing foreclosure would be far better off keeping their house in good shape for having their house sold for them in a lottery because they could avoid the liability of the balance due after a foreclosure sale , avoid bankruptcy , possibly getting money back after the sale , selling tickets for $10 gives far better odds than any state lottery due after a foreclosure sale , avoid bankruptcy , possibly getting money back after the sale , selling tickets for $10 gives far better odds than any state lottery. So far from the responses I see no advantage losing a house to foreclosure over losing a house to lottery sale.
    So basically if only one lottery ticket is sold, a person could buy a property for 10 bucks? If it were destroyed like in one of the photos posted here, it might be worth the $10 investment, then people can brag to their buddies they bought a house for 10 bucks. How is that going to help a family going through bankruptcy? How is that going to settle the debt owed to the lender?
  • Are you sure you want to delete this post?
        
    Chet Ruminski Wrote:
    jaredsxtn Wrote:

    What about the people who live in the house you're willing to raffle off? As Dock said - isn't that what we already have when it comes to foreclosures? The owner gets kicked out and new people bid to purchase the house as cheap as possible. How does that help the family who was just kicked out of their house?

    Dock's pictures expose the other problem with your proposal - people who have nothing to lose may resort to trashing the house they are getting kicked out of just to spite the bank who took it over. That not only drives down the value of that specific house, but the value of the houses surrounding it because property values (and taxes) are based off of neighborhoods and zip codes and not specific properties.

    There are plenty of ways to help people who are going into foreclosure, but a raffle system to give their house to the highest bidder isn't one of them.

    People that live in a house facing foreclosure would be far better off in having their house sold for them in a lottery because they could avoid the liability of thePeople that live in a house facing foreclosure would be far better off keeping their house in good shape for having their house sold for them in a lottery because they could avoid the liability of the balance due after a foreclosure sale , avoid bankruptcy , possibly getting money back after the sale , selling tickets for $10 gives far better odds than any state lottery due after a foreclosure sale , avoid bankruptcy , possibly getting money back after the sale , selling tickets for $10 gives far better odds than any state lottery. So far from the responses I see no advantage losing a house to foreclosure over losing a house to lottery sale.

    " How is that going to help a family going through bankruptcy? "

    It would help a family avoid bankruptcy. The family wouldn't have to worry about paying the balance because the lottery would satisfy the debt. Don't hold the drawing until the last ticket iis sold. All holds, taxes and liens would be satisfied by the lottery. Establish cost of an unencumbered house plus X % to maintain lottery. Divide that by 10 and that is how many tickets would be sold. ($100,000 dollar liability plus X%)/ 10.

    "I see no advantage losing a house to foreclosure over losing a house to lottery sale"

    Probably reversed subject order. But many advantages to a lottery sale.

  • Independent
    California
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    On Kickstarter, you get your pledge back if the goal isn't reached. You could do it the same way. The goal is set to a number slightly above the remaining principal, and the draw will be held within ten days of that target being reached. If that target isn't reached within a certain time frame, then if it's close enough the auction house takes the money and holds the draw anyway. Otherwise everyone gets their $10 back and the house goes to auction as usual.

  • Brooks, AB
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    I would say homeowners who trash their houses prior to foreclosure should be charged with vandalism. Besides they are only hurting themselves worse by having this kind of action on their life record.

    Better to accept the foreclosure, hand the keys over and move on with life. It's not the end of the world.