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Old 10-17-2008, 06:01 AM
 
Location: Florida
22,672 posts, read 23,379,324 times
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We're holding a short term mortgage and I was quickly scanning it before filing it yesterday.
Because of certain circumstances, this one popped out at me.
This is is just quoted from an on-line example just so I could explain it here.
"(J)No Impairment of Value of Mortgaged Property. No building, improvements, Fixtures, or other property now or hereafter covered by the lien of this Mortgage shall be removed, demolished or altered in such manner as to diminish materially the value of the Mortgaged Property, without the prior written consent of the Mortgagee. "

Our does NOT specify the value impairment part.....simply that no alterations, etc may be done without written consent.

Should I assume every mortgage we ever had contained a clause like this and that we always have , as do most people, go ahead and do whatever they want in regards to modifications?
I am asking out of curiousity but also because what was an acceptable risk 6 months ago (taking a mortgage in order to allow the buyers extra time to sell their house) is becoming a bit more of a concern lately and they are planning alterations that wouldn't make it the house we left, should we get it back.
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Old 10-17-2008, 11:24 AM
 
878 posts, read 1,976,689 times
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in such manner as to diminish materially the value of the Mortgaged Property

Our mortgage has a similar clause. It is a way for banks to protect themselves against a buyer who takes out a mortgage and then tears down the house or otherwise trashes the land, basically making the mortgage worth less than the note.
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Old 12-04-2008, 02:50 PM
 
1,095 posts, read 3,786,947 times
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Right, it doesn't mean all alterations of any sort must be improved, just those that materially diminish the value of the property. In other words, you can't tear your house down because the house is part of the security for the loan.
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Old 12-04-2008, 06:28 PM
 
Location: Great State of Texas
86,067 posts, read 78,910,205 times
Reputation: 27669
So what does the mtg company do ? I've seen lots of pictures where the folks have trashed the house and walked away. These are the recent REO's.

Looks like sheer revenge or anger taken out on the walls, cabinets, appliances and fixtures.

Did these people just get away with it ?
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Old 12-05-2008, 01:03 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,765,055 times
Reputation: 249
Quote:
Originally Posted by HappyTexan View Post
So what does the mtg company do ? I've seen lots of pictures where the folks have trashed the house and walked away. These are the recent REO's.

Looks like sheer revenge or anger taken out on the walls, cabinets, appliances and fixtures.

Did these people just get away with it ?
the bank has every right to go after them for the difference. not just the repairs but the labor and any other fee's obtained with dealing with this.

will they? we don't know at this point. the smaller banks most likely. it will be interesting to see what happens. lots of homes are getting mold, mildew, bug infestations as well in the north the winter is bursting pipes and flooding houses. i am waiting to see how this impacts industry and real estate.
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