The Henderson House

This is a vacant house in my travels.  A long time ago, Mrs. Henderson lived here and I mowed her lawn.

The Henderson House
It’s been vacant for at least five years.  Why is that?  It’s stood up remarkably well for being empty all that time.  I’ve often admired it and wondered how the foreclosure business works.

Mystery, I guess.

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4 Responses to The Henderson House

  1. Jim says:

    Empty houses–another barometer of collapse to look for in our travels.

  2. Loosehead Prop says:

    A graceful old house built with the materials of a different time. Natural materials (such as lime plaster on lath walls) can hold up a long time so long as the roof stays solid and the plumbing doesn’t freeze. Angled to capture the southern sun, too.

    Why has it never gone on the market, where an astute buyer could pick up a well-built house at a reasonable price? Why, accounting fraud, of course. Right now that unpaid mortgage still constitutes an asset on that bank’s books. The moment they declare it in default and foreclose it becomes a liability on that bank’s books. Hence all the empty houses, the economic growth engine of our time.

  3. Loosehead Prop says:

    The strategy is extend and pretend. Extend the “asset” on the books and pretend it’s actually an asset. AKA kicking the can down the road.

    The thing to remember is that the bank never loaned any real money for the asset. The bank said it was good for the money, and another bank said, fine with me, because through the miracle of double-entry bookkeeping each one gets to claim the house as an asset. Each one made jots in its books, but no money changed hands. In fact, no money ever needed to exist. On top of that, the bank that “loaned” the money now gets an income stream from the buyer’s monthly mortgage payments, which is the only real money in the whole equation. When the buyer stopped paying, the bank lost an income stream and now has to weigh the legal costs of trying to get blood from a stone, but it still gets to claim that house as a $150,000 asset on its books. That “asset” is all the shareholders care about because it inflates the share price, and it’s all the Federal regulators care about because it lets them claim the bank has sufficient assets to offset its liabilities and isn’t really pennies away from being broke.

    If the market was strong enough that the bank thought they could move the house quickly, the bank would sell it because they want the mortgage payments, the only real money in the whole equation. I do plead ignorance, though, of what it takes to move a house through insolvency in Maine. What is really needed, and has been since 2007 at least, is a forum for speedy debt forgiveness that would relieve the mortgagee of both the house and the debt. That would allow a house like that to get back into circulation quickly and not sit empty for years. But debt forgiveness would mean that house prices would plummet as all these houses that are sitting out come back on, and it would mean that money would disappear–all that “money” on the bank’s ledgers as asset would be wiped out. Of course, those banks would go under, and that takes us back to the fiasco of indebting the US taxpayers with a trillion dollars of national debt in order to bail out a bunch of “Too big to fail” banks and insurance companies.

    I hope that wasn’t too long-winded. It’s a shame that a lovely, solid house in Lisbon Falls, one that could be a home for a family, sits empty because Wall Street pays the piper, but that’s how it is.

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