Who Will Sort the 'Trash-Outs'?
Amid the many negative impacts from the fallout of the subprime crisis is an emerging and disturbing trend: foreclosed homeowners are trashing their properties on their way out the door.
"On the lookout for disturbing trends? Here's one for your pile: According to a recent article in Fortune, there has been a noticeable increase in not just fraud but arson that has kept pace with the housing depression. Professionals in the insurance and lending industry are bracing themselves for all manner of similar situations, as homeowners either trash, or simply leave their trash lying around their houses, often taking off without even claiming their furniture. This is already a dirty problem in the housing business, with owners, lenders and banks having to figure out a way to stick each other with the check when tenants destroy their property on their way out the door. Woe is the person left behind to clean up the chaos."
"Homeowners have crunched the numbers and decided their houses are worth less than their mortgages. The open secret about the current housing crisis is that it is almost wholly built upon debt, which is to say the opposite of money. Everyone owes everyone: American banks borrow money from overseas, structure bizarre loans at home for Americans, which are then sliced and diced into securities and sold back to the international debt markets. The whole thing is a feedback loop made of bills needing to be paid. The best-kept secret of the crisis, however, is that homeowners...are bailing out and leaving the banks and lenders to sort out the mess of past-due notices themselves."
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