I saw an advertisement for an estate sale recently that mentioned some items of interest to me so I went to have a look. A person was handling the disposition of some personal property for another couple who had moved out of town. They left because of a mortgage reset where their loan payment was going to TRIPLE to over $10,000 per month! That had to be a shocker for them and it was very likely a foreclosure walk away.

A lot of people leave such situations in an angry mood, but it’s important not to be too angry. The case in point here is that I was looking at furniture, some artwork and a few other items of interest. While I was looking, I was told that doors were for sale, cabinetry (installed on the walls), a built-in wall unit, drapery and other attached were also for sale.

I said nothing but I thought that in addition to the REO process, the lender is going to be in for a very large fix-up bill because this is the kind of stuff that will have to be replaced before the home will sell, or the lender will have to make a large downward adjustment in price.

Perhaps more importantly in cases like this, lenders might be very apt to pursue the former owners for full restitution of additional damage caused by the removal of all of the built treatments in the home. A borrower would be better served to ask to grant a deed in lieu of foreclosure to demonstrate they were trying to do the right thing despite the fact that they couldn’t pay the mortgage payments. Be careful not to awaken sleeping giants by trying the squeeze a few extra dollars out of an asset that is not going to be yours in the very near future. It could come back to haunt you.