Kathryn Clark, an artist and former urban planner, created a series of quilts based on home foreclosures in different cities. The locations of the foreclosures are random, based on statistics from each city, and are represented by holes in the fabric. This quilt is called “Cleveland.” See some others at Trendland. Link -via Nag on the Lake

An underwater homeowner decides to walk away from his house, which then goes into foreclosure. The bank takes the house and then sells it. End of story, right?

Maybe not. Some banks are suing "strategic defaulters" for the amount of money they lost:

Joseph Reilly lost his vacation home here last year when he was out of work and stopped paying his mortgage. The bank took the house and sold it. Mr. Reilly thought that was the end of it.

In June, he learned otherwise. A phone call informed him of a court judgment against him for $192,576.71.

It turned out that at a foreclosure sale, his former house fetched less than a quarter of what Mr. Reilly owed on it. His bank sued him for the rest.

The result was a foreclosure hangover that homeowners rarely anticipate but increasingly face: a "deficiency judgment."

So what, you think - they can't squeeze blood out of a turnip. Ah, but there's money to be made. Lots of money:

Because most targets have scant savings, the judgments sell for only about two cents on the dollar, versus seven cents for credit-card debt, according to debt-industry brokers.

Silverleaf Advisors LLC, a Miami private-equity firm, is one investor in battered mortgage debt. Instead of buying ready-made deficiency judgments, it buys banks' soured mortgages and goes to court itself to get judgments for debt that remains after foreclosure sales.

Silverleaf says its collection efforts are limited. "We are waiting for the economy to somewhat heal so that it's a better time to go after people," says Douglas Hannah, managing director of Silverleaf.

Investors know that most states allow up to 20 years to try to collect the debts, ample time for the borrowers to get back on their feet. Meanwhile, the debts grow at about an 8% interest rate, depending on the state.

Link

Sheriff’s deputies, movers, and the Nyergers’ attorney went to the bank and foreclosed on it. The attorney gave instructions to to remove desks, computers, copiers, filing cabinets and any cash in the teller’s drawers.

After about an hour of being locked out of the bank, the bank manager handed the attorney a check for the legal fees.

Link via The Volokh Conspiracy | Photo (unrelated) via Flickr user taberandrew used under Creative Commons license

Officials with the South Carolina Education Lottery say the man, who moved to South Carolina from New Jersey six years ago, was unemployed and about to lose his home before his ticket matched the winning numbers.

Link

Gus Lubin of Business Insider’s Money Game takes us on an unusual tour of sort: using Google Maps, he has created the Satellite Tour of America’s Foreclosure Wasteland. I was surprised to learn that 1 out of every 9 homes in Las Vegas are in foreclosure!

Link – Thanks Adam!

More and more struggling homeowners are doing their own mortgage modification: they simply stop paying, and continue to live in their homes while the foreclosure process drags out for a long, long time:

“Instead of the house dragging us down, it’s become a life raft,” said Mr. Pemberton, who stopped paying the mortgage on their house here last summer. “It’s really been a blessing.”

A growing number of the people whose homes are in foreclosure are refusing to slink away in shame. They are fashioning a sort of homemade mortgage modification, one that brings their payments all the way down to zero. They use the money they save to get back on their feet or just get by.

This type of modification does not beg for a lender’s permission but is delivered as an ultimatum: Force me out if you can. Any moral qualms are overshadowed by a conviction that the banks created the crisis by snookering homeowners with loans that got them in over their heads.

David Streitfeld of The New York Times explains why some homeowners are in foreclosure, and loving it: Link

Sweet Juniper blog has an interesting post about how nature is now reclaiming some of those abandoned houses. They use the description "feral houses," which given the condition they are in, seem very appropriate:

I’ve seen "feral" used to describe dogs, cats, even goats. But I have wondered if it couldn’t also be used to describe certain houses in Detroit. Abandoned houses are really no big deal here. Some estimate that there are as many as 10,000 abandoned structures at any given time, and that seems conservative. But for a few beautiful months during the summer, some of these houses become "feral" in every sense: they disappear behind ivy or the untended shrubs and trees planted generations ago to decorate their yards. The wood that framed the rooms gets crushed by trees rooted still in the earth. The burnt lime, sand, gravel, and plaster slowly erode into dust, encouraged by ivy spreading tentacles in its endless search for more sunlight.

Link – via NOTCOT

Previously on Neatorama: 100 Abandoned Houses (also in Detroit)

With this sweltering desert city enduring one of the largest tumbles in housing prices for any urban area since the Depression, there is an unrelenting stream of foreclosures to choose from. On some days, hundreds are offered for sale at the auctions that take place on the plaza in front of the county courthouse.

There is also a large supply of foreclosed families who can no longer qualify for a loan. And that is prompting a flood of investors like Mr. Jarvis, who wants to turn as many of these people as possible into rent-paying tenants in the houses they used to own.

Real estate got just about everyone into trouble in Phoenix, and the thinking seems to be that real estate is going to get everyone out.

The low end of the real estate market here — and in some equally hard-hit places like inland California and coastal Florida — is becoming as wild as anything during the boom.

David Streitfeld of the New York Times has more: Link

(Photo: Joshua Lott / NY Times)

The funeral industry is usually recession proof. After all, as Arvin Starrett, spokesman for the National Funeral Directors Association, said "The honest-to-goodness truth of the matter is that everybody does die."

So it goes to show how bad the current economic situation has become: a cemetery on Highway 86 in Imperial, California, is in foreclosure!

Annika Mengisen of Freakonomics Blog has the answer to the question I’m sure you’re all thinking of: will the …, um, occupants be evicted? Link

(Links open in a new browser window/tab)

	Excessive Ping Pong Score Celebration Footballers do it, soccer players do it, so why not celebrate your score in ping pong? Here's Adam Bobrow's take on how to excessively celebrate in ping pong (don't miss the score at the end of the clip) Link
	Metal Grandma Think that heavy metal is only for the young? This grandma is waaay more metal than anyone else in this concert. Go Nana! Link
	What Happens to Stuff Left in a Foreclosed House? Someone has to clean up after homeowners were evicted from their foreclosed houses... and given the current economic situation, business is booming for the "trash out crew." Link
	Is this the Face of the Young Leonardo da Vinci? When Italian science journalist Piero Angela was looking through da Vinci's work, he noticed an image of a nose - upon closer look, it may just be the face of a young Leonardo. Link
	How many camels fit in a Subaru? The answer, apparently, is at least two! Count for yourself: Link

For more the web's most interesting videos, check out: VideoSift.

Chris Hoyer, a Tampa, Florida, lawyer told homeowners that there are three simple words that they can say to stop the foreclosure process, or at least delay it for a while: produce the note.

Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.

And just like that, the foreclosure proceedings came to a standstill.

Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.

During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.

Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.

Link

(Photo: Chris O’Meara/AP)