We’ve been talking about foreclosure-stripping for years around here— that practice of homeowners in foreclosure removing everything that’s not nailed down and selling it, as well most of the stuff that IS nailed down. While mortgage contracts generally spell out that this is not allowed, the practice has been widespread, and homeowners have little fear of prosecution.
In 2010 a Palm Beach home was stripped bare and arrests were made. As the public defender said in this case:
[T]here is a foreclosure action pending, but the final order has not gone through. We would be arguing no probable cause for any crime. It sounds like probably what happened, this guy owned the place, it’s in foreclosure, he said, ‘Guys: take everything out of it.’ It may be immoral and unethical, but it’s not a crime if you own the property.
Because there has been very little done about prosecuting foreclosure strippers, I was surprised by this report coming from Minnesota:
With his building under foreclosure, Donald Mordal decided to take some items that he says belonged to him.
Now, he’s facing criminal prosecution, only the second person charged in Anoka County in the past 25 years under a 1963 state law. The law makes it a felony to remove or damage property subject to a mortgage with intent to hurt the property’s value. It is so rarely used that officials in the Hennepin and Ramsey county attorney’s offices couldn’t recall prosecuting anybody under it.
Mordal, a businessman in Nowthen, was one of many Minnesotans caught in the foreclosure crisis. After years of building his business, he couldn’t make his mortgage payments in June 2009, and the bank foreclosed on the 7,600-square-foot building he’d helped construct. With it sitting empty, the charges say, he removed some doors and windows, plumbing, cabinets and landscape boulders he had bought and installed.
This is especially interesting because, as the report stated:
Technically, he owned the property he is alleged to have taken illegally.
I would think this would make this difficult to prosecute.
There was something else that I ran across this week that I found novel. While checking the Phoenix Craigslist ads in search of “even the walls must go” foreclosure sales, I ran across this interesting ad. The homeowner was selling several things that were installed in the home, but they made this comment:
[E]verything I’m selling has been approved to sell by my bank.
It appears that everything the guy is selling is things that he probably added. He’s selling ceiling fans and dimmers, not toilets and copper pipes.
The odds of being prosecuted like the Minnesota man remain remote, but the Phoenix Craigslist guy probably has the right idea– it might be best to ask first before selling off anything attached to the house.