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Sunday October 21st 2018

Meet The Squatters

Housing prices have gone down a lot in the past few years. As a result, millions of Americans owe more money on their home than their house is now worth. Already, millions of homes have been foreclosed on. And millions more are in the process of being foreclosed on. Recently, something like 25% of the home sales in the U.S. have been foreclosures.

Suppose you buy one of those millions of homes that was foreclosed on for say $600K. You spend $40k fixing it up. You move in and you are enjoying life in your new home.

One day you go off to work. When you return home after a hard day at the office, you find the locks have been changed and a family with 9 kids has moved in! You call the cops, but the cops say, “Sorry, that’s a civil matter” and do nothing!

Unbelievable? Well, something like this actually happened in Simi Valley, California. The family that was foreclosed on, brought their lawyer and a locksmith and reclaimed their home long after they were evicted and after it was sold a couple of times. They are claiming that the foreclosure was illegal, and they own the home!

Evicted family breaks locks, reclaims home

Meet The Earls
Jim and Danielle Earl, and their 9 children (six adopted) lived in their house on Mustang Drive in Simi Valley, California for nine years. They fell behind on their mortgage with GRP Financial Services, who foreclosed in their home. They were evicted from the home in July 2010.

The home was then sold to an investment group, Conejo Capital Partners, who spent $40,000 upgrading the home for sale. Conejo Capital Partners intended to flip the house for a quick profit. They already had a buyer lined up when they bought the home at auction. The buyer was scheduled to close on the home until the Earl family moved back in. The buyer has since backed out of the sale.

The Earl family claims that they made payments on the home to catch up on their mortgage, but the mortgage company didn’t credit their account with the payments. Their attorney, Michael Pines, thinks the foreclosure was fraudulent and says the family’s home was taken illegally.

Foreclosure Mess
In many states, there is a moratorium on foreclosures. At the very least, there have been irregularities in the foreclosure process that has been going on the past few year. Robo-signers, charges of perjury and even outright fraud are casting a cloud over the titles of many foreclosed homes. In Florida, title insurance companies are refusing to insure the title of foreclosed homes.

These problems with the title will bring the sale of foreclosed homes to a grinding halt. Who is willing to purchase a foreclosed home if previously evicted owners could show up at your door one day and ask move in?

Are Foreclosed Homes Toxic Assets?
Remember the toxic securities from the sub-prime crisis? Those are securities that no one wants to buy because nobody knows what they are worth. Well now we have toxic homes–foreclosed homes that nobody will want to buy because someday somebody may show up claiming they were illegally foreclosed on.

Meet The Squatters: The Movie
There may be a hilarious Hollywood screenplay somewhere in this mess. Meet The Squatters: an assuming guy buys a house and moves in. One day the guy comes home from work to find a family has moved in with him. The family is that hillbilly family from The Simpsons with a dozen young’uns and all kinds of critters. Hilarity ensues! If we can get Ben Stiller attached to this script, it may be on the fast track to getting greenlighted.

Here’s another viewpoint of this story from Irvine House Blog:
Evicted HELOC Abusers Break In and Squat in Foreclosed Home

Here is nobel-laurate Paul Krugman writing in an op-ed piece in the New York Times: The Mortgage Morass

And here is another side of the store from the investment group that purchased the home: OFFICIAL STATEMENT FROM CONEJO CAPITAL PARTNERS LLC REGARDING THE PROPERTY LOCATED AT 5893 MUSTANG DRIVE, SIMI VALLEY CA

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