Thursday, December 13, 2012

Mortgages and Squatters after an Economic Collapse?





 

Hello Mr. Aguirre, I just finished reading your book and wanted to thank you for taking the time to write it. It has really made me feel at ease knowing that I have already put in place most of your ideas and preps to weather bad times. So again, thank you. Also, I have a question about how mortgages were handled in your country during the collapse. I cant find much info on it but in general were people left in there homes if they stopped paying or were they evicted soon after payments stopped. In particular how do you think it would play out in the USA? Any advice or information on the subject would be greatly appreciated.

Thanks again,

Greg


Hi Greg, you’d think that after an economic collapse you’d be cut some slack, right? Unfortunately no, that’s not the case.
At least regarding to what happened in Argentina, it came down to the kind of mortgage that you had. If you had taken it in dollars you were really out of luck because going from a one dollar to one peso exchange rate to a one dollar three pesos exchange rate while you earned money in pesos was the death of you. In some cases, you were a bit better off. If your mortgage was in pesos you only paid back pesos, so even though the value of property did go down some, in some cases it was a good deal to pay back in rapidly devaluating pesos while the property was keeping its value. Thinking of a similar situation in USA, you could say that if you get a good real estate deal, it might be worth paying back in slowly or rapidly devaluating Usd (if the price was right to begin with, post-hosing bubble crash, that is). Again, there were exceptions and it depends on the price agreed and the specific property and area. 
Now, if you didn’t pay your mortgage you would certainly lose your home to the bank.
What it comes down to, not only because of what we learned from Argentina but from other cases, is that banks don’t forgive debts, even though you are forced to pay for theirs. I know, doesn’t seem fair, but life isn’t going to get more fair after SHTF simply because we wish so, as I often say, it generally get even more unfair.
Consider this, while you may lose your home to the bank, if someone squatters in your property, or your tenant refuses to pay, it will be pretty hard for you to get them out. Especially if there’s children involved, it may take years until your get rid of squatters.

As society keeps deteriorating, there’s the issue of corruption to keep in mind as well, so listen up folks, Ferfal story time;
 We think of squatters as generally shabby looking individuals. I know of an incident involving a very different kind of squatter just a few blocks away from where I used to live in Buenos Aires.
This old gentleman from my neighborhood had a second house nearby for sale. The house must have cost USD 300.000 in those days. One day a man drops by this man’s home, wearing a fancy suit, driving an expensive sports car. He presents himself and says he wants to buy the man’s house, he’s not making any counter offers. While talking with the older man, Mr. “fancy suit” opens up his briefcase and pulls out…  a gun. No, he pulls out money! 50.000 usd cash, right then and there! He just wants to make sure the house is his, his wife happened to know the property well and just wants to seal the deal. He gives the advance to the man and agrees on meeting next week. Before leaving he asks if his wife can take a look inside, she wants to get a decorator in there working as soon as possible, so the old man hands over the keys. A couple days later, a strange family is already living in the old man’s house, and “fancy suit” disappears. When the man goes to the police about these “squatters”, showing that he still owns the title to his property, he finds that the cops show little will to help.
As the legal battle starts, he learns that Mr. Fancy Suit was in fact the lawyer of the people that moved into his house, a local corrupt “businessman” that handles shady businesses, with strong political support in the area and the cops in his pockets. Legally, they argue that the 50.000 USd was the payment for the house. Its been over a decade now. The old man didn’t get his house back last time I checked.
So that’s it boys and girls, in places like Argentina, as we say “el que no corre, vuela”. If he doesn’t run he flies, meaning pretty much everyone is out there to get you or scam you in some way. Be careful, you never know.
FerFAL

7 comments:

Anonymous said...

Hasta el mas pelon tiene trenzas.

Jose

Anonymous said...

Lol, you can't live in a burned house, don't you ?

And in a big city, the ground has more value than the building isnt it ?

Don Williams said...

1) Philadelphia USA has large areas of rundown houses/poverty. Some poor people are having their houses stolen by false deeds with forged signatures, as explained here by the local newspaper:

http://articles.philly.com/2012-12-06/news/35649932_1_house-thieves-check-property-records-thefts

An example:
"Deed theft is so brazen in Philadelphia that a police officer's name was used as the buyer of the homes of three people who supposedly signed deeds after they had died. Had death records been checked, it's unlikely the transfers would have occurred."

2) See also
http://articles.philly.com/2012-11-21/news/35229038_1_deeds-records-commissioner-joan-decker

(4 page news article --scroll to bottom and click to go to next page)

Anonymous said...

Empty houses and lots in Latin America are an invitation for squatters. And boy are they hard to evict through the legal channels. Even rent houses can be a liability. As a rule of thumb, we never rent to lawyers or government bureaucrats, and we always make the renter sign his eviction notice at the time of signing the lease contract. Even then, we've had one renter over stay three years before we could get him out.

Jose

Don Williams said...

1) In Philadelphia, there was even a "Bishop" who stole a CHURCH with a fraudulent deed. ha ha

http://articles.philly.com/2012-12-02/news/35550237_1_phony-deeds-county-prosecutor-check-property-records

"When Pastor Robert C. Hester wanted a new church, he simply stole Pennsauken's Temple of Deliverance for his own, authorities say.

The Camden County Prosecutor's Office says Hester - also known as Bishop Hester and Prophet Hester - used forged documents in 2010 to secure title to the church at 7603 River Rd. He then changed the locks.

The real church officials called police when they found themselves unable to enter, prosecutors said."

Περικλής Καρασαββίδης said...
This comment has been removed by a blog administrator.
RamboMoe said...

Wow, that's a horrible story about that old man who lost his house.