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Some People have More Money than Sense

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  • Some People have More Money than Sense

    I got this story from the lender (a coworker) when I went to pay the annual property taxes (it's escrowed) and saw that the property taxes had decreased significantly.

    Millionaire buys a house on the bay in Wisconsin for $300,000. It's right next to his huge, gorgeous house. Tells the lender he's buying it because he doesn't want anyone else to move in. Then he tears down that house to improve his view of the bay. This decreases the market value of the property to about 1/4 of what it was.

    Good for him that he can throw away that much in assets, I guess. It means that the loan is underwater now, though. Not sure what the lender is going to do about that.
    "I look at the stars. It's a clear night and the Milky Way seems so near. That's where I'll be going soon. "We are all star stuff." I suddenly remember Delenn's line from Joe's script. Not a bad prospect. I am not afraid. In the meantime, let me close my eyes and sense the beauty around me. And take that breath under the dark sky full of stars. Breathe in. Breathe out. That's all."
    -Mira Furlan

  • #2
    Usually people have to get a permit to tear down a house. It's possible the lender was aware of that.

    On the other hand, if he defaults on the property, even if it is "under water", he no longer has any control over what gets built there.

    And we all know what that might lead to and what could happen to his view.
    "I don't have to be petty. The Universe does that for me."

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    • #3
      I'm surprised there's nothing in mortgage agreements that would forbid the borrower from making changes to a residence that'd significantly decrease it's value.

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      • #4
        If he's got all that money, then he should be able to eat (drink?) the underwater loan.

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        • #5
          Yeah, the mortgage has language that says you agree to keep the property maintained so that it doesn't lose value.

          It is probably a default condition that he tore down the house, but rather than foreclosing it might make more sense for the bank to just keep taking payments from him, if he's a millionaire as my coworker says he is.
          "I look at the stars. It's a clear night and the Milky Way seems so near. That's where I'll be going soon. "We are all star stuff." I suddenly remember Delenn's line from Joe's script. Not a bad prospect. I am not afraid. In the meantime, let me close my eyes and sense the beauty around me. And take that breath under the dark sky full of stars. Breathe in. Breathe out. That's all."
          -Mira Furlan

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          • #6
            Quoth Ghel View Post
            Yeah, the mortgage has language that says you agree to keep the property maintained so that it doesn't lose value.

            It is probably a default condition that he tore down the house, but rather than foreclosing it might make more sense for the bank to just keep taking payments from him, if he's a millionaire as my coworker says he is.
            Maybe, maybe not. If the guy's that stupid he may not be a millionaire for long. A lawsuit might be productive.

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            • #7
              Quoth Mental_Mouse View Post
              If he's got all that money....
              If he has that kind of money, he shouldn't need a loan to do a teardown.
              I'm trying to see things from your point of view, but I can't get my head that far up my keister!

              Who is John Galt?
              -Ayn Rand, Atlas Shrugged

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              • #8
                I tried to find the story and didn't but I did find this which I found intersting: https://madison.com/news/local/kenos...532851222.html
                "Is it hot in here to you? It's very warm, isn't it?"--Nero, probably

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