Squatting: Celebs Are Arrested For it, Politicians Encourage It

The many ways squatting is being used to help—and hurt—homeowners.

Randy and Evi Quaid were arrested for illegally occupying the guest house of their former residence. Image: Santa Barbara County Sheriff's Department

It’s hard to leave your home — even when staying in it becomes a potential felony, and even when you’re connected to the elite. That’s what Independence Day and Kingpin actor Randy Quaid and his wife Evi learned when they were arrested last week on charges of illegally occupying the guesthouse of their former residence in Montecito, Calif.

The motivation behind the Quaids’ behavior is unclear. But it shines a spotlight on the increasingly prevalent issue of squatting, a trend closely connected to the foreclosure crisis. Another recent celebrity example? Roc-A-Fella Records co-founder Damon Dash’s ex-wife is squatting in her duplex loft that recently sold for $5.5 million at auction.

Squatting itself is nothing new. In the past, celebrities like actor Liev Schreiber, actress Rosario Dawson, and The Clash frontman Joe Strummer were considered squatters. The difference between then and now? Then, squatting was synonymous with homelessness. Today, it’s often about the foreclosure crisis.

The polarizing issue is being labeled as both a new type of foreclosure scam and a radical solution for families with no other alternative. HouseLogic takes a look at the rise of squatting and its dual roles in the mortgage crisis.

Squatting as foreclosure scam

Some real estate scammers move into abandoned homes and demand a cash incentive (anywhere from $1,000 to $1,500) from banks to vacate. So rather than paying tens of thousands of dollars in court costs on top of repair fees for any damage the squatters might have caused, some banks pony up.

Another type of scam squatter is the one that moves into a house and pretends to be a tenant. If anyone comes knocking, they buffer themselves by claiming a lost lease or by refusing to allow entry onto the property until authorities find the rightful owners and go through the appropriate channels to get them out.

The tactic has gained popularity in the last two years, with poseurs living it up in large mansions, staking claim to several properties at a time.

Squatting as radical solution

When a family’s chips are down, squatting may function as a last ditch attempt to keep their home. This is what Democratic Congresswoman Marcy Kaptur of Ohio recommended to her constituents in a 2009 interview with radio host Amy Goodman: “I say to the American people, you be squatters in your own homes. Don’t you leave.”

She told families to stay in their foreclosed homes until the bank produces the bad loan note that led to foreclosure. This tactic hinges on a technicality in the subprime mortgage crisis. Because mortgage loans are bundled and sold frequently, the foreclosing bank often is unable to locate the note in question. Could this tactic buy you time? Possibly. But it’s no substitute for utilizing legitimate foreclosure counseling services.

Another politician urged something similar, albeit a bit more public. When a California mother of three with one son undergoing chemotherapy was facing eviction, the family’s congressman, Democrat Bob Filmer, staged a protest at the home and planned to prevent authorities from entering it.

While Filmer was accused of using the family’s foreclosure situation as a political stunt—it was later learned that the foreclosure filing had been called off the day before his action—he’s not the only one with this idea. In 2009, activists with ACORN (Association of Community Organizations for Reform Now) encouraged families to resist eviction by group protest. The arrests resulting from the protest would draw attention to the homeowner’s plight and potentially get them help, the group reasoned.

Then there are pro-squatting groups like Operation Welcome Home. In May, the organization helped homeless families to move into unoccupied homes in foreclosure. Their assertion: that foreclosed homes owned by banks that benefited from the federal bailout should be used by people who need them.

As noble as their intentions are, the families they placed were still vulnerable to losing their shelter at any given time. If a neighbor files a trespassing complaint, the family occupying the home could be forced to leave by authorities.

How it affects you

The affects of foreclosure are wide-ranging. If you have foreclosed homes in your neighborhood, you could find squatters there. Take steps to ensure those properties are secure or risk the added stress of dealing with squatters who may damage the property and hurt overall property values.