Michael M. Phillips, the WSJ’s Renaissance man, reports on A1 that banks and mortgage companies are paying homeowners not to trash their about-to-be-foreclosed-upon homes. The “trash-out” phenomenon has been growing in the last several months along with the delinquency rate.
These days, bankers and mortgage companies often find that by the time they get the keys back, embittered homeowners have stripped out appliances, punched holes in walls, dumped paint on carpets and, as a parting gift, locked their pets inside to wreak further havoc. Real-estate agents estimate that about half of foreclosed properties to be sold by mortgage companies nationwide have “substantial” damage, according to a new survey by Campbell Communications, a marketing and research firm based in Washington, D.C.
The most practical way to ensure the houses are returned in decent shape, lenders and their agents say, is to pay homeowners hundreds or even thousands of dollars to put their anger in escrow and leave quietly.
Lots of anger out there, which leads us to our Violently Pissed-Off Homeowner Quote of the Day, as seen by a mild-mannered Realtor:
“When you’re losing your dream, and you’re paying all this money to it…and you’re hoping that it’s going to go up, and you’re going to make 100 grand like everybody else did, and it doesn’t happen—you know, people get upset,” says Joe Kraemer, a broker with Century 21 Advantage Gold who deals in foreclosed homes.
The Los Angeles Times reports that veterans are having a hard time finding work, despite all the military promises that their training and experience has big real-world value:
Some return to civilian life with physical injuries and psychological damage. Many come back to families that need their financial support, but find that the skills they gained in the military don’t carry over to the current job market. Their only options are unstable, entry-level positions.
Recent research by the Department of Veterans Affairs suggests that today’s young veterans need more help making the transition to civilian jobs, given that 23% of veterans in 2005 were out of the workforce, up from 10% in 2000.
Rumors continued to dog Wall Street yesterday, with Lehman Brothers falling 9 percent on whispers that it faces a Bear Stearns-style run on the bank, Reuters says. That helped send the Dow down 120 points.
Right in time for Lehman, Bloomberg reports this morning that a Citigroup analyst upgraded Lehman to a “buy”, saying it has plenty of cash.
In economic news, the FT reports that corporate profits fell 3.3 percent in the fourth quarter, a number it calls “striking because the data did not include the billions of dollars in writedowns and loan loss provisions that companies have taken as a result of the subprime mortgage problems.” The losses were well above the 0.1 percent downturn predicted by economists.
The paper also notes that full-year economic growth in the U.S. was 2.2 percent for 2007, the lowest since 2002.