916WI seems to not be able to let go of this fantasy about "reducing the principle" when NO ONE has EVER said principle should be reduced for ANYONE.
The practical thing to do would be to perhaps cut the payments in half and prolong the mortgage term INSTEAD of foreclosing!!!
Politicians COULD have helped facilitate this but none of them ever has...Tells us something about politicians, doesn't it??!!!

I feel very bad for those people who paid their bills, have worked hard to get a home they can raise their family in and then lose their jobs and lose their homes. I agree there should be more help for people who qualify, ie lose their jobs through no fault of their own. But how long do we help them? Some people have been out of work for 2 years. Banks taking losses will just pass that down to their other clients. Houses sitting empty are not good for property values or the neighborhood. Getting a good deal on a house may mean someone who could never afford a home, can now buy one. I sold my home this year at a very big loss - I couldnt afford the payments any more. I bought a new house, at about 30% below its value and cut my payment in half. I knew enough to take of things before it went into a forclosure situation.

Troublemaker.....In your analogy the only fair way to do it would be to have EVERYONE in the country offered the new terms and have the banks(or government) absorb our losses--not only those who were irresponsible in their decisions involving their mortgages but also those who are able to make their payments. I for one love your plan and would look forward to a serious reduction to the principal I owe! Sorry--but there's no way that that would fly.......

Let's assume the previous owner had only a little equity, so they would have been paying on a loan of about $160,000 given the declining market value. The new owner only had to get a loan for $90,000 and mortgage loan rates are only about 4.25% now versus the 8% range of the last decade. So, same house but the new monthly payment is about half. The previous owners were expected to pay about twice as much as the new owner for the same house. This great deal wasn't offered to them. That's what is not fair about the situation.
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And the Federal Government set up a billion dollar+ program two years ago so that existing homeowners could refinance under better terms, but the mortgage lenders have avoided using it. That's what smells fishy!

Velheim,

The new buyer bought the property from the bank which owned the property. Are you not concerned about the financial stability of the bank-which might be locally owned?

Yes, its terrible that someone's home was foreclosed upon, however, the story is not about the previous owner-its about a woman who found a property that was a good deal to her. This is a win-win situation for the new buyer and the neighborhood which now has an occupied home owner living in the home.

Okay, so shes capitolizing off of the misfortune of another person losing their home.

What a great real estate agent!

Especially the small community type banks have been hit hard. The big national banks have more flexibility and resources. Remember "too big to fail?"

Oreally......Most of the banks have lost a serious amount of money by having the deadbeats refusing to make payments on their mortgage during the foreclosure process. Perhaps it would be a wiser move to hit up the people that have lived rent/mortgage free in some cases for up to two years for a donation to save our schools.......

With so much bank-owned real estate around, it's tempting to think that a bank might be willing to donate a foreclosed house to the group struggling to save Janesville schools, which could then raffle it off. Now that would raise some money.

superdave, taking things attached to the home is not a good idea, as it will drive down the the price the home will sell for after forclosure and increasing the ammount still owed by the original homeowner.

Dorko..your wonderful gov't at work for you, who's here to help you. Just ask Dodd and Frank, the authors of the housing crisis that got us where we are.

@jenai23: I agree with your post, and congrats to you and your husband. The only thing I would change is "One person's loss is always another one's gain". Not true! Most transactions in a free market are win/win - else there would be no transaction!
In the case of the foreclosure, the defaulted borrower is not matched up against the new buyer. It's two separate transactions. The original borrower defaults, the bank takes back the property (txn #1) - the bank has now lost money, but only on paper. The new buyer comes in and buys the property (txn #2) - the bank has just realized their loss. So the loss is shared by the original borrower (who loses the house) and the bank (who loses the difference). But the bank is happy to sell to the new buyer at the new, lower, market price (win/win).

" But I would not equate towel racks to a roof or a furnace." tha tis my point it doesn't even come close and must stay. Yes I said you may disclose no HVAC and I also stated GOOD LUCK.
I see jenai and royo get it!

"There's what's legal and there's what's right."
Yep guess so Dave-
prop up the whole house and move it- yes?!

There's what's legal and there's what's right. Often the same, sometimes different. I believe the point I made at 8:41 a.m. is the legal version, but I am no lawyer. But it also seems wrong to me to take things that are attached. Some of you would take the furnace? Seriously?
The argument that "I own it, I'm taking it" applies to the entire house now doesn't it. So would you take the front door? What about the deck? The new windows you paid for three years ago? The wallpaper? Makes no sense, and it's just mean-spirited to leave the house in a condition where it can't be lived in and needs big money repairs right away. What kind of a person would do that?
As far as the person buying the foreclosure - they have done NOTHING wrong. If you disagree, what is your alternative? Tear the house down? Let people who get foreclosed on live in the house *forever* anyway? In the recent article on tax foreclosures people seemed to think that the main goal was to get the house rehabbed if needed and get a family in there. But if the bank forecloses, tear the house apart? So it's okay for the gubmint to claim ownership through property taxes, but not okay for the bank to claim ownership even though they paid for the house in the first place.
Some wacky thinking here.

My husband and I bought a foreclosed home 8 years ago. What a fantastic deal we got :) I remember a few months back when everyone was complaining about the new city assessments. Most comments complained about all of the empty foreclosed homes in the area bringing down the property values. So now those of us who want to remedy that situation and get a great deal are suppose to feel guilty and have no morals. Get a grip on reality people, you can't have it both ways. One person's loss is always another one's gain. I am not going to feel guilty in a few months when we purchase a second foreclosed home, instead I will celebrate. I will celebrate as my monthly mortgage payment is super low and I have the extra funds to remodel and buy all new furniture for it. It sucks that people lose their homes, but I pay my monthly payments and deserve to buy whatever home I would like to purchase. I will sleep sound at night knowing that I make excellent choices for my family.Do all of you feel guilty when you use a coupon at the supermarket or by an item of clothing at Kohl's that was 80% off the original price? Yeah I did not think so.

Frogger, you took the words right out of my mouth....good luck selling a house without a furnace. lol

Some of you people are so naive (cough creative cough). If a house is foreclosed on, is it just supposed to sit there empty and no one can buy it because they would get too good of a deal? If you find the right house at the right price, you buy it whether its been foreclosed on or not.

I want to know how this lady is taking advantage of a situation. What situation? Did she kick the previous owners out? No, she bought the house after the previous owners defaulted. Don't think this is really taking advantage of a situation.

frogger,

The offer to buy/sell a home requires that certain items are to be disclosed-for example if you wish to take your roof off before you sell it-this needs to be disclosed. Its really not a big deal. Dislosing these items protect the seller and the buyer. But I would not equate towel racks to a roof or a furnace.

Its been a few years since I last purchased a home-but I am not certain my inspector examined the towel racks-but I am certain the furnace and roof where thoroughly checked.

If the furnace stops working do you stop paying the mortgage? This comments are why things are so screwed up nowadays.

If you paid cash for the house you get to gut it before you leave? good luck selling that as well for the price of an ungutted house.

Did you finance the home with a roof?? So you get a new roof you are you going to take that with??

creativeworker- did you finance the home WITH a working furnace. Goog luck getting a buyer to buy your home w/o a furnace. I couoldn't take towel racks because they were screwed into the wall and covered with a cap. They even say the area rugs go with the home and curtains. Take them out before listing the home or they go with or you need a disclosure that the HVAC isn't included and GOOD LUCK!

People thinking of themselves as having the rights to those items they purchased if they default might need to check on the legalities of that. Furnaces/AC's when installed become part of the "property". The same with "built-in" appliances like cooktops, ovens, etc. That's the way it used to be though.
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However, recently I've been hearing of people literally stripping homes down to the studs. Toilets, tubs, dishwashers, sinks, etc., etc.

IF we had taken out home line of credit, then the bank would own my new furnace, carpet, appliances etc.. but we did not. HARD Cold Cash. Our money. Our money went into improving our home, if any one benefits it will be me.

Sigma40, your comment is excellent. Couldn't the Gazette see how insensitive this photo is to the previous owners and the negative comments it would generate toward the current owner? Imagine waking up to see a photo of another person smiling in what used to be your kitchen and knowing thousands of others are reading of your loss. Just such an insensitive editorial decision to run that photo. Much like another recent poor editorial decision to run the article on the immigration talk.

Really as far as being in foreclosure stripping houses before they leave. Maybe they should. Because the banks are getting HUGE tax write offs, and then they turn around and sell it. Between the tax write off and the sale, very few are losing money. WHY give them anymore. IT is set up to protect the banks, not the home owner.

frogger, if I could find a way. Seriously I do not see us taking the furnace with us, point is though. The bank does not own my furnace, it was not financed. I own it. The bank does not have the right to it. The same could be said for our kitchen redo, bathroom, and new carpet. NONE was financed and if I want to take it with me I will. The AC was also paid for with cash. As far as house inspection. IF there is no appliances, furnace, Ac, that is the bank's problem. They are not entitled to those things.

creatinve the furnace stays- unless you would like to replace it with a cheaper version fine. If it is part of an inspection and installed it should stay. Going to take the new roof with you too>?????!!!!lol

"The previous owner is at fault for stripping out the appliances.
"Like I said I don't agree with this. They are NOT screwed down- well some are installed but free standing appliances can be kept just like in any home. Yuo can write into the offer to get to keep them.

"are just as sick of people like this woman who take advantage of a situation, "
I said I agree with your statement except for this part- if she didn't "take advantage" which she isn't- more of these would just sit there.

troublemaker- when they already a year behind do you think $100 less a month will help???
It isn't the new buyers faulth the old owner failed to pay the mortgage for what ever reason.

"creativework
Sep 26, 2011 at 7:06 a.m.
Suggest removal Those of us who pay our monthly obligations are just as sick of people like this woman who take advantage of a situation, as we are sick of the people who walk away from their house because they owe more on it than its worth. Even though many are capable of making their payments."

Well said.
Janesvillean- a home is an investment just like my 401k- right now I keep losing money month after month. I DON'T cash it in because I am losing money. You sit and wait it out. In 20 years it will surely have more in there than I put in it. That my friend is how an INVESTMENT works. The market goes up and down. You still need a place to live no matter the value of it. You don't just dump the home because you bought it 2-3 years ago and it has lost value. When you rent there certainly isn't ANY value. I see it next door. They figured they were upside down so they dumped the home- what you got the loan you pay for it! They didn't leave because they couldn't afford it anymore.

"Finally, 916WI, I hope you never hold a mortgage and lose your job, get divorced, or experience a medical emergency. Because those life events are the primary drivers of foreclosures."

Mediacal BK is the only one that makes sence to me. You bought it you pay for it! I love the "divorced " one. Get divorced doesn't mean you don't FINISH paying the bills. One canot buy the other out of the house - SELL IT.

Look people -- the previous owners owed money to the bank -- if they chose to strip the house to pay the mortgage or other expenses, thats their option. Again -- they owned the house and owed the bank. We cannot tell people how they must meet their obligations. They must determine that for themselves. You -- may or may not do the same thing had you been in the same circustances financially.

These people prosper while the ones who lost the home suffer.. then write an article to rub it in their faces.. awesome article to write about. And we wonder why there is so much hatred amongst us.

I saw one once on St Lawrence where they gutted the whole kitchen NOT just appliances. Cabinets and all! This should not be alowed. You bought the house from the bank(loan I mean) with cabinets you should leave it in tack when you dump the home.I can see taking appliances because not all homes come with them when you buy it but thingd drilled into the wall should stay.

@creative: To quote the article "it would need all new appliances because the former owners had stripped them out". It depends on the appliance. Generally, things that are attached to a building (built-in dishwasher, central air, furnace) go with the house. Things that are not (refrigerator, washer, dryer) do not. An attached microwave should stay, one sitting on the counter can be taken. Since the article stated "all", I assume the previous owner took some appliances that she/he should not have. Sounds like you would too!

Not that it matters much, but Heidi Gottschalk is not a local realtor, nor is the firm she works for local. She is an agent out of a Sun Prairie office. She has done nothing immoral or shameful by purchasing a home that went through the legal channels of foreclosure. If anything, she's done our community a service by being capable of removing some of the distressed inventory from the market place which has added to the supression of traditional sales in our area. On a separate note, though the system may not be perfect, there are and continues to be, standards & procedures that are implemented when a bank takes a home back. We will never see private mortgage investors come back into the lending business if homeowners can choose to renegotiate loan terms when things get tough, or they make bad choices. As unpopular as it may seem, there needs to be consequences like foreclosure....unless of course the American public would like to continue to pick up the tab.

Heidi is a very kind lady and would not do something to harm someone else. Her actions are perfectly fine. She purchased a property that was for sale. Whatever happened to that house previously is simply NOT her responsibility.

A foreclosed property the street behind us burned last month.. still waiting for some one to clean it up.

SUPERDAVE if the previous owner is like we are. WE bought the appliances in our home, they did not come with the home, nor were they included in the price of the home. THEY are ours no matter what we do in the future. SO if we buy another house and decide to take them with, so be it they are ours. MY guess is the people who owned the house before had purchased those appliances they were not part of the mortgage. The The bank does not own every thing in a home. WE just put in a brand new furnace if we leave tomorrow it's coming with us. We paid cash for it not the bank. So do not assume a new owner has a right to appliances etc....

Those who should feel guilt and shame are those in DC (Barney Frank et al) who helped to create the RE bubble in the first place.
The previous owner is at fault for stripping out the appliances.
The currnet owner is doing the right thing in buying this property and fixing it up. She is also taking a gamble - there is no guarantee in investing!

I will make sure not to buy a home from her ever or mention her name to anyone. I only work with people who have morals.

Those of us who pay our monthly obligations are just as sick of people like this woman who take advantage of a situation, as we are sick of the people who walk away from their house because they owe more on it than its worth. Even though many are capable of making their payments.

These are separate moral issues. It would have made a tremendous difference to many owners, and to the US economy, if distressed owners had more options for renegotiating terms (such as Chapter 13 offers investment properties). Yes, there would have had to be mutual losses by the banks in such a scheme, but they are often losing money on these transactions as it is (which is why credit remains so tight nearly two years after the technical end of the recession). But a new owner is negotiating a purchase after the legal process has taken place. They didn't affect the chances of the old owner in any way.
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Once a change of ownership becomes legally inevitable, it is better to have these homes occupied and maintained.
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As for the responsibility of the buyers, up until 2009 there was a billboard right here in Janesville that proclaimed real estate a "guaranteed investment". That was an awful lie to tell people, many of whom were making their first home purchase and given incredibly dangerous mortgage products, products which many experts say were difficult to understand, all the while being told not to worry because the guaranteed increase in their home's value would allow them to refinance. Who do you think had more information in these transactions -- the homeowners? Or the banks, brokers, agents, and other real estate professionals?
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Finally, 916WI, I hope you never hold a mortgage and lose your job, get divorced, or experience a medical emergency. Because those life events are the primary drivers of foreclosures.

Actually he has a point. A large number of lenders have refused to work with borrowers, even when the borrower was able to make most of a mortgage payment. Furthermore, many homeowners were at the mercy of faulty mortgage documents, and what seems to me, to be fraudulent or downright abhorrent behavior. Most people that are losing their house, or have lost their houses did NOT over-extend themselves, or had exotic mortgages, they just lost their jobs. Now, should she feel bad? No, circumstance, is circumstance, but then we don't exist in a vacuum, and for somebody to "win", someone has to "lose".

Troblemaker - GET A CLUE!

Troublemaker.......LOL! She should feel guilt and shame because the initial owners seriously overextended themselves and bought way more home than they could afford. Then when their "investment" didn't offer enough of a return they simply walked away from it--typically while not making any payments for months while the foreclosure process was taking place........Yeah, I'm sure she's losing all kinds of sleep at night!

TroubleMaker- I don't think she should be ashamed since the deal would have been offered to anyone, but I agree with you that the SHAMEFUL part is that the original owners probably weren't offered any kind of a break at all...THAT is the truly shameful part of it.

This person and others like her should feel plenty of guilt and shame. The previous owner likely would have been able to pay the terms she's getting, but they weren't offered that option. Now the previous owner is broke and bankrupt, but she got a great bargain! The whole system is shameful. I hope the bank lost their a## on the deal.

Make sure your credit score is 750-780 or the banks won't even look at you.