Hat tip to SM for sending this along, from the Seattle Times:
The 8,000-square-foot mansion was dark and in foreclosure for years. So last weekend when the for-sale signs came down and the lights lit up, neighbors were relieved. “We were like — ‘finally, somebody’s going to make that place a home,’ ” says one. But then some new signs went up.
“No trespassing,” the signs say. “Privately owned property. Not for sale.”
That’s odd, neighbors thought. The West of Market neighborhood in Kirkland is friendly, easygoing. So one of them called the real-estate agent to ask what was up. What he said floored them. The house is still for sale for $3.3 million. Whoever is living there had broken in. They’re squatters.
“It’s blown everybody away around here,” said another neighbor, who asked me not to print her name. “It takes some real guts to just waltz into a house like that, I’ll give them that.”
We were standing across the street from the six-bedroom, six-and-a-half bath house, dubbed in the ads as “Mediterranean Natural.” With its rock exterior and terraces, it looks like a miniature hotel.
“Elevator to the theater, wine cellar & tasting room, game room, recreation room, nanny’s quarters, den/library, culinary artist’s kitchen, bonus room and the lavish master suite & bath,” reads a listing from 2008, when the house was for sale for $5.8 million.
If you’re going to squat, might as well do it in style.
Kirkland police say it’s true — someone just showed up and changed the locks a week ago. They now claim they own the place. Police don’t believe that, but also don’t tend to get involved in landownership disputes and so haven’t done anything, yet, to remove them.
The house’s history is like a recap of the economic meltdown.
A modest house was torn down to make way for this behemoth, but the builder defaulted on it in 2008 and the mansion went into foreclosure.
It ended up in the hands of Venture Bank, in Lacey, Thurston County. Then that bank failed — too many defaulted loans — and was seized by the feds. So the house went to another bank, called First Citizens, which, according to legal documents on file at King County, now owns it.
Or so they think they own it.
A form posted on the door of the house by its new “tenants” says “all rights, interest and title in said property” has been transferred to something called the “Priority Rose Children’s Outreach” in Bothell.
That’s a charity that was incorporated only two weeks ago, according to the state Secretary of State’s Office. Its purpose is listed as “spiritual training for adults and children in a religious safe environment for the development of all mankind.”
That sounds nice. But the phone number for the charity is also the number for a Bothell company called NW Note Elimination that specializes in “eliminating mortgages.” It does this by finding flaws with loans or titles and exploiting them to stake outright claims to property.
One of its strategies, according to a primer it posted on Craigslist, is to create a land trust and claim title to a piece of property, then try to challenge the existing mortgages as flawed in hopes the banks eventually will just go away.
“The idea is that with this economy, people are looking for any kind of real-estate loophole they can find,” said Sgt. Robert Saloum of the Kirkland Police.
But squatting? In somebody else’s home?
I called the charity to ask how moving into a house you don’t own promotes the religious and spiritual development of all mankind. Nobody called me back.
Saloum said when Kirkland police went to the house, the woman who answered the door showed a form claiming she owned the house. “It’s up to a court to sort that out,” he said. The actual owner, First Citizens Bank, is now trying to get them evicted — a civil-court process that can take months.
Needless to say, neighbors are confused. Someone can show up to your house, change the locks and there’s nothing that can be immediately done about it? “We are getting calls from neighbors out there wondering if they can safely leave their houses vacant while they go on vacation,” Saloum said.
Real-estate experts say you’re not likely to return from a trip to find strangers living in your house. Squatting usually happens in foreclosed or completely abandoned homes. Dan Sytman of the state Attorney General’s Office said they have seen cases of phony landlords moving renters into foreclosed houses, collecting rent for a few months and then leaving the duped renters to deal with the rightful owners.
But staking claim to a multimillion-dollar mansion? “That’s a new one for us,” he said. Who is in the house? The police wouldn’t say. I went and knocked on the door, but no one answered.
The real-estate agent had $80,000 worth of staging furniture inside, but last week he managed to get in and cart it away. So the rooms are empty. There were a few signs of life — a cat, and shoes lined up inside the back door. A neighbor told me she sees people coming and going. A woman, sometimes a man. Plus a couple of children, wheeling bikes into the garage.
“It’s crazy,” she said. “It’s unnerving. But it’s the biggest gossip to hit West of Market in a long, long time.”
Standing there, it occurred to me that maybe mansion-squatting was inevitable. We did easy living with loose credit and turned houses into cash machines. Wall Street leveraged that frenzy into a black-box casino. Then to bail everyone out the government rains down dollars we don’t have.
What’s happening in Kirkland is just the most naked expression yet of what the crash was about. The lure of something for nothing.
Not all that surprising, but philisophically, is it much different than someone who strategically defaults and “squats” until they are foreclosed/evicted? Anecdotally, I have heard of people (down and out mortgage rep’s to be exact) doing the same squatter routine in Newport Coast. I guess the moral of story is if you are going to squat, go big! Who wants to squat in a house in Riverside when you can be carressed by ocean breezes. It all seems like expressions of antipathy towards the banks who gave all these people their rope and noose . . .
I don’t know squatting laws, but I understand in some states it can be quite drawn out. Maybe this will be part of the next economic stimulus plan.
Man! What a way to steal an entire house!
The neighbourhood has a valid reason to worry about this. In the Greater Toronto Area (GTA), title fraud is becoming a serious and ever increasing problem. One day you own your home, and the next day you find out the mortgage has been transferred to a fake owner, but with a new and very real mortgage attached to it.
It can cost the legitimate owner thousands of dollars to clean up the mess, during which the bank could foreclose on the property and sell it off to recover their losses.
Now granted, squatting in a foreclosed home is not exactly the same thing as stealing a title. But it could lead to similar problems if law enforcement doesn’t get their act together on this one pretty fast. Extensive delays could trigger off all kinds of statutes of limitations, and the thieves could end up legally owning the home that they stole.
When I saw the picture of the house and the title you chose, Jim, I thought you were just describing the house…
Sounds like pretty smart squatters.Maybe they should get a real estate license.
More graft exposed:
Nearly 4,500 borrowers in Sacramento County are trying to do short sales right now. Here are just a few of the things to watch out for, and what players say they’re seeing:
• Unlicensed short sale “negotiators” are approaching homeowners, asking for thousands of dollars up front to negotiate with lenders, said Tom Pool, spokesman for the California Department of Real Estate. Only attorneys and licensed brokers can ask for money up front – and only after the DRE approves the agreement with an individual seller. The DRE recently published a consumer alert about this and other scams.
• Real estate agents or these negotiators are lowballing offers to overwhelmed banks, a practice called “flopping.” After the bank approves a short sale at a low price, the agent or negotiator quickly flips the house to a new buyer for much more. Elizabeth Weintraub, a Sacramento short sale agent with Lyon Real Estate, said would-be floppers often want to use their own title companies. That’s a red flag.
• Real estate agents say banks are illegally seeking extra money in hidden side deals before approving short sales.
http://www.sacbee.com/2010/06/11/2814573/home-front-short-sales-and-ways.html#ixzz0qYn86JQA
So tell me… How exactly are short sales better than foreclosure?
Someday money will be worth something
shadash- “Someday money will be worth something”
But the way things are going, debt is worth less and less with every short-sale/foreclosure.
In South Africa they call this building hi-jacking and they do it to whole apartment blocks! It can also cost fortunes and take years to sort out legally while the hi-jacker is busy bribing the cops and the local government officials while getting legal aid for being poor My advice is dont let it happen in the states..its difficult to eradicate once it gets going and means someone must always be home or the building otherwise secured.
In related news, Bakersfield’s David Crisp, head of a multi-million-dollar straw buyer ring involving hundreds of properties, still has not been prosecuted.
At first glance I thought it was a condo complex.
There was a story on This American Life either last week or the week before about a guy who was doing similar hi-jinx with court records in New Orleans.
Why steal someone’s credit card information when you can take the whole house?
I thought the same thing based upon the title and picture. That’s not too ugly a condo project.
Speaking of SA. I had a coworker from there and she was describing how homes in her neighborhood were really defensive compounds. They had things like walls, barbed wire, broken glass cemented into the structure, bars on all doors and windows, etc. It sounded really scary because this was a “good” neighborhood.
Sometimes we American’s don’t realize how good we have it compared to many other places.
It is nice to see a good World Cup going on there now.
Welcome to California, the world’s fastest growing 3rd world nation.
You know what, I’d rather see a family that needs shelter come in and sit in this house than some ahole who is stiffing the taxpayer by defaulting on a home with a couple of Beemers parked out front.
Common Sense…..you’re right about California…
I can’t remember who it was who said this but I remember some historian/writer once said that “….someone turned the world upside down and all the trash fell out and landed in California….”
Seriously…everytime I leave LA and come back after a vacation, I’m so depressed…this place really is a third world country. People here are so freaking low class.
There’s always been something broken about the fact that someone can break in, burglar, and then steal a million dollar house and the police can’t lift a finger until the courts say so.
Maybe the realtor rented it to them for some extra cash?
14.Welcome to California, the world’s fastest growing 3rd world nation.
common-sense | June 13th, 2010 at 10:01 pm
The house in question is in Washington state.
Frankly, I support this. If the government and banks want to artificially hold back inventory and leave structures idle, then I’m happy to see homeless people head right on in.
Maybe when this happens in enough neighborhoods (hopefully ‘hoods with a lot of realtors (other than Jim, who plays it straight and for whom I have a lot of respect), mortgage brokers, and other members of the “house-flipping industrial complex”), home buyers will wish the government didn’t keep supporting their house prices artificially.
One Solution.
http://en.wikipedia.org/wiki/Castle_doctrine
Except that the house was vacant, so the Castle Doctrine isn’t really doesn’t apply here, except possibly to the squaters.
Having spent some time at Hewlett Packard Cupertino back in the days of core memory and HP2114’s I remember feeling nervous due to the fact that If I had lost the keys to my condo I could break and enter with my bare hands (no tools necessary). So despite being the land of the brave, home of the free and show me some ID, California (even in its bad ‘hoods) is very very definately NOT third world (be glad, be very glad and honour your people in the services for helping to keep it that way)
Didn’t work out too well for this guy.
http://www.mortgagefraudblog.com/index.php/weblog/permalink/man_charged_with_grand_theft_over_35m_in_property_scam/
The house in question is in Washington state.
Geotpf | June 14th, 2010 at 7:41 am
Yes, I realize that, but it just seemed fitting to generalize about CA given the large number of vacant properties, and our propensity to enable the nouveau broke.
And andrewa…I don’t know where you live or where you venture, but you can keep Compton, South Central L.A., East L.A., Southeast S.D., Oakland, Fresno, and a multitude of other areas. And I didn’t say it was 3rd world right now, but it’s coming. This state will keep chasing businesses and middle class jobs out, the economy will depress middle class incomes, the border(s) are wide open for a source of cheap labor who either voluntarily, or involuntarily will not assimilate. Oh yeah, it’s looking better by the minute…
I read that the squatters were removed and one was arrested: http://www.seattlepi.com/local/6420ap_wa_mcmansion_squatters.html