Tuesday, April 6, 2010

Unlawful Possession and the Foreclosure Crisis

I dislike the word 'squatting' because we tend to use it to mean unlawful possession we don't like; unlawful possession we do like we call 'pioneering' or, if it continues for long enough, perhaps 'adverse possession.'  Therefore, to describe unlawful possession as 'squatting' is to end the debate over the morality of any particular form of unlawful possession before it begins.

Let's talk about the morality of unlawful possession.

The foreclosure crisis has increased at least four types of unlawful possession of homes.  Which, if any, do you consider 'wrong'?  Why?

(1) Possessors of their former homes, whom lenders have not removed.

Lenders who have foreclosed on properties are increasingly refraining from evicting former owners, who now are in unlawful -- and rent free -- possession of their former homes.  100,000 former homeowners are living in their foreclosed properties in the Inland Empire area of California alone.  The glut of foreclosed homes on the market makes a quick sale of many properties unlikely.  An occupied home holds its value better than an unoccupied home, which often deteriorates from neglect.  So even though lenders may claim they are merely being kind (which they sometimes do), they have a strong financial incentive not to evict the former owners.      

(2) Possessors of their former homes, who refuse to leave despite lenders' efforts.

Some former owners remain in possession of foreclosed upon properties, refusing to leave unless forcibly evicted by the local sheriff, despite demands from their lenders that they vacate.  In fact, Congresswoman Marcy Kaptur has urged them to do it.  Refusing to leave extends their possession -- perhaps indefinitely.  The sheriff of Wayne County, Michigan has refused to carry out forcible evictions of former owners.  The sheriffs of Cook County, Illinois and Cuyahoga County, Ohio have refused to forcibly evict renters in properties that have been foreclosed.   

(3)  Possessors of empty homes, who care for the property.

Take Back the Land and other advocacy groups have begun placing homeless families in vacant homes in neighborhoods where foreclosures have become common. The group screens the families, and requires them to earn sweat equity in the properties by cleaning them and repairing them.  The families in unlawful possession are sometimes welcomed by neighbors, because they care for the properties, preserving the value of surrounding homes and keeping vandals at bay. 

(4)  Possessors of empty homes, who do not care for the property.

In some places, foreclosed upon homes have been unlawfully possessed by drug users and thieves, who use the homes as drug dens and bases of criminal operations. 

Now, I suspect most people -- but not all, by any means -- would find unlawful possession of type 1 morally unobjectionable, and unlawful possession of type 4 morally objectionable.  Do you agree?

But where does the line fall between types 2 and 3?  Is the critical factor the external benefits provided by unlawful possessors -- benefits to neighbors and, ultimately, us -- that determines the morality of their possession?  Or is their behavior intrinsically moral or immoral?

I would love to hear your thoughts.

Mark Edwards

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Hi, Mark,
A very interesting post. To fill out the picture in practice, perhaps you need to add one more scenario: the situation of foreclosed homes which are empty and bank-owned (and, in theory, bank-possessed) which are not being maintained by the bank and so become an eyesore, attractive nuisance, etc. to the neighborhood. While these properties are "legally owned" and formally "legally possessed" they raise some of the same issues that your hypo raises which can go to the morality of the banks' possession of them.
Take care,
Tim Iglesias

Posted by: Tim Iglesias | Apr 8, 2010 1:45:35 PM

Hi Tim -- thanks so much for the comment, and that is great insight. In fact, I've seen that recently several cities have enacted ordinances responding to precisely these issues -- Buffalo, Cleveland, Oakland and San Jose among them.

Bank neglect definitely qualifies as a another type of possession following foreclosure -- we could call such possession 'legal (but not actual) possessors who do not care for the property.' The morality of this type of possession following foreclosure probably falls somewhere below, in my opinion, unlawful (but actual) possessors who care for the property, and above unlawful (but actual) possessors who do not care for the property. Do you agree?

Posted by: Mark Edwards | Apr 12, 2010 8:23:22 PM

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