What do foreclosures, code violations and stories around the campfire
have in common? They’re all frightening of course! But what if you
combined them into one big, scary tale? We’ll need a monster, of course
- but that part’s easy. We’ll use the most powerful, most evil monster
known to man. A creature so singularly alarming that every time it is
involved, no matter what the story, the scary title remains the same:
“If We Weren’t the Government, We’d Be Arrested For This.”
Once upon a time, the local government stumbled upon a great way to increase revenue: heap hidden, onerous fees onto some of the people buying foreclosures, virtually guaranteeing their failure. Sound frightening? Good, then you’re in for a treat. Booooooooo…
Here’s
how it goes: Mr. & Mrs. Homeowner incur a number of code/zoning
violations which they dispute with the local authority. During this
time, hardship befalls them (or maybe it’s a bad loan, or a big, bad
wolf - either way the result is the same) and the foreclosure process
starts its evil dance around their hearth. “To heck with you, city power
brokers,” they scream, “we’ll not pay a dime of your fees or your penalties. We’re losing the home to foreclosure and you can go pound sand.” The city/county sees that the house has gone into foreclosure and gets scared. Why? Because now those
code/zoning violations will prevent the next owner from selling the
house… and the next seller is the only thing more hair-raising than the
government: Banks! These are dire straits for the henchmen of the local
authority; what to do?
But you, gentle reader, should know by now to never underestimate the creativity of evil. In the middle of the night, these men and women of authority sneak into the recording office. Moving with the ease and confidence of the protected, they move through the records and with nauseating glee they PULL all the red tags off the books! “The horror… the horror.”
That’s
right, now if anyone like… oh, say an REO agent or a title company or
even a buyers’ agent researches the property, it’s free and clear and
ready to go. Hey, that sounds pretty generous on their part, doesn’t
it? Yes, maybe too generous? Good on you for paying
attention because the other shoe is about to drop (actually, it’s more
of a swift kick than a drop…) Soon thereafter, a nice young couple buys
the foreclosure and makes it their home. With dreams of white picket
fences and evenings by the fire, they never see it coming. They never
checked under the bed or inspected the closet for monsters. Suddenly it
happens: they get a visit from the code enforcement people. Somehow,
mysteriously, all those red flags reappeared on the property. “Hi, Mr. & Mrs. Naïvete. Congratulations
on buying your new home. You owe us $100,000 in fines and penalties.
Have a pleasant day and a better tomorrow.” Ahhhhhhh!
Sound far-fetched? I spoke this week with the managing broker for one of the biggest “big-name franchises” here in San Diego. He currently has TWO of these in his office, both levied by the City of San Diego
and each totaling nearly $100,000. I also spoke with two agents from
two different offices who had each dealt with a client that received
almost $200,000 in fines and penalties in their Welcome Basket from the
Let’s all stand back in awe of the monster’s never-ending creativity and moral equivalency. I guess if you run your own financial house into the ground far enough, you can rationalize just about anything. Sweet dreams…
