Attorney Michael Pines “admits to breaking into homes at least half a dozen times… leaving the clients [most famously baseball legend Lenny Dykstra] to squat in their homes while he defends their legal right to possession.” More in an L.A. Times profile:
Although Pines advises his clients not to pay their lenders, he wants to be paid.
“I tell my clients that if you’re living in a house for free, you should be able to afford to pay a lawyer,” Pines said, adding that he usually charges an hourly rate of $650.
5 Comments
I always thought people that were not paying their mortgage should be taxed on the “imputed income” of what their mortgage should be (even if they argue that shoddy paperwork makes it difficult to identify who the appropriate lienholder is.)
So that lawyer isn’t that far off base with his “with the money you’re saving” argument.
Of course, when trying to make a living from deadbeats, you need to insist on cash up front before doing any work.
I usually charge $650 but I will take whatever you have on you.
Robert: You pay your mortgage to do two things. One is to acquire equity in your home. The other is to pay interest to the lender.
If you aren’t paying your mortgage, you aren’t accruing equity in your house. So there’s no “imputed income” from the equity.
The interest you pay to the mortgage holder compensate them for the loss they took by tying up their money to buy you a home at a historical price rather than the market price as you lay out your money. You aren’t getting that benefit, since you will never get to own or sell the house. In fact, that benefit doesn’t exist for anyone since the house dropped in value. So there’s no “imputed income” from forgiven interest.
A foreclosed mortgage on a house that has dropped in value is a loss transaction all around. Nobody will make any income from it.
@David: I presume it’s twisted logic like yours that led to the passage of the “Deadbeat Specu-vestors Tax Relief Act”, the outrageous bit of legislation that exempts forgiven mortgage debt from income tax. (http://www.irs.gov/individuals/article/0,,id=179414,00.html).
I wish I could pay myself in forgiven debt and not be taxed; but in this country hard work and thrift is punished, while deadbeat spendthrifts are lavished with tax handouts and benefits.
Reuven@I think that you are confusing “forgiven mortgage debt”, which does constitute income of a sort in that money that was originally lent is converted into a gift, with “funds not spent paying one’s mortgage”, which do not constitute any sort of income since the loan remains a debt.