Here’s one homeowner that should have sent a thank you card to the lender that foreclosed: [Thanks "Vegas RE" and Rob for the links!]

AVONDALE, Ariz. — The little blue house rests on a few pieces of wood and concrete block. The exterior walls, ravaged by dry rot, bend to the touch. At some point, someone jabbed a kitchen knife into the siding. The condemnation notice stapled to the wall says: "Unfit for human occupancy."

The story of the two-bedroom, one-bath shack on West Hopi Street, is the story of this year’s financial panic, told in 576 square feet. It helps explain how a series of bad decisions can add up to the worst financial crisis since the Great Depression.

Less than two years ago, Integrity Funding LLC, a local lender, gave a $103,000 mortgage to the owner, Marvene Halterman, an unemployed woman with a long list of creditors and, by her own account, a long history of drug and alcohol abuse. By the time the house went into foreclosure in August, Integrity had sold that loan to Wells Fargo & Co., which had sold it to a U.S. unit of HSBC Holdings PLC, which had packaged it with thousands of other risky mortgages and sold it in pieces to scores of investors.

Today, those investors will be lucky to get $15,000 back. That’s only because the neighbors bought the house a few days ago, just to tear it down.

We hear a lot of calls to "stabilize home prices".  How does this happen when the home was mortgaged for more than it was worth in the first place?  We hear a call for "workouts" and foreclosure moratoriums.  On a case-by-case basis, some workouts can be beneficial to lenders and borrowers- but what can be done in cases like this?

 

The only way to save Ms. Halterman was to kick her out.  Ms. Halterman is not alone.