Monday, December 1, 2014

Helpful Information With No Other Home

What else?

Well, you really want to hang around my blog as long as possible, don't you?  Here are a few more things, and my "get it in writing" admonition, one more time:

1. I remind you again to get any agreement in writing. Please. Lenders are making "cash for keys" agreements and then, once they get the keys, not paying the agreed sum. You give the lender's representative keys, she or he hands you a cashier's check or money order. If that doesn't happen, you've just been scammed, and if you don't have a written agreement, you have no evidence that you ever had any agreement.  And a "cash for keys" agreement should be heading toward the mid-four figures.

2. If your building is managed by a property management company and a Notice of Default is filed on the building, ask the property manager if the company has the security deposits in an escrow account. If they do, ask if you can apply the deposit to your rent payment. If it appears that the landlord has abandoned the property, the manager may let you do this. I've heard of a few cases so far where the management company did just that, so there's no harm in asking. That insures that you get your deposit back before the foreclosure sale.

3. I've been asked a couple of times why the lender didn't file a Notice of Trustee Sale when the Notice of Default had been filed many months earlier. The three months between the Notice of Default and the Notice of Trustee Sale is the legal minimum, but the lender isn't required to file it promptly. In some cases, the lender and your landlord may be negotiating, in some cases the lender is so overwhelmed that they just haven't gotten 'round to it. If you live in a house or condominium, the lender may not want to foreclose because then the lender would have to pay the condominium or homeowner association dues. This leaves you as a tenant in limbo, in that no one is responsible for the building, but that's not necessarily a bad thing. In some cases, no one is asking for rent either.

4. If you want to buy the building you live in after the foreclosure sale, talking to the realtor they send 'round to "encourage" you to leave is probably not worth the trouble. I wasn't sure why this was true, as it seemed to me that selling the property to a sitting tenant would save a lot of grief for everyone. The tenant doesn't have to move, the property doesn't sit empty for months, the lender unloads it promptly--a win-win.
What I suspect is that the Foreclosures-R-Us services aren't set up for that, and that the realtor is paid to clear the building, not sell it. So if you decide you want to buy your house or you and your building-mates want to purchase a duplex or apartment building, you should look at the Notice of Trustee Sale, which should have the name and contact information for the foreclosing lender. Call the lender and ask for the loss mitigation department, determine who is handling that property and begin the negotiations.

And since this was written, some lenders have seen the light as well, and offered to sell the houses they've repossessed to sitting tenants. For those tenants who want to purchase the house they've been renting, this could be a good thing, or it could be an attempt by the lender to get rid of a lemon. So before you decide to buy, please read and consider this.

5. I've had a couple of tenants come across this blog after they signed "cash for keys" agreements, not knowing that they had the right to a 90-days' notice to vacate. What they want to know is whether or not they can get out of the agreement, as the Foreclosures-R-Us realtor who was emptying the building for the lender neglected to mention that California tenants have the right to a 90-days' notice. Remember that realtors are kin to used car salesmen, not lawyers, and don't have to give you that important little piece of information. Unfortunately, it's likely that getting out of such an agreement would be difficult and would require the services of an actual lawyer. After all, unless you were talking with the realtor on the public square, only you and the realtor know that the realtor told you that if you didn't take the "cash for keys" and move within two weeks, the Sheriff would put your possessions out on the lawn, skipping the little piece of information about the 90-days' notice.

That's why I so hope that you're reading this before you signed the "cash for keys" agreement, and not afterwards. And that, if you've run across this just for your own education, that you warn friends, relatives and co-workers to read this before they make a decision, not once they've signed the agreement.

6. It is unfortunate that we cannot legislate decent behavior. But in many cases, expecting realtors to be polite and respectful is asking too much. This seems to be true particularly when tenants refuse the cash for keys offer, and indicate that they know they have a right to a 90-days' notice. (I think realtors get some kind of incentive payment for clearing the building cheaply and quickly.) Always ask for the realtor's card and, if the realtor is rude or abusive toward you, call the manager of the realtor's office to complain. As someone once said to me in a similar situation, "It won't do any good, but you'll feel better."

You always have the right to ask the realtor to leave, and if someone is threatening or assaults you, it's a matter for the police.

7. I've heard of some tenants seeking out soon-to-be-foreclosed houses to rent. While I don't quite understand it--I don't want to have to move every few months--some people who may be moving out of the area might latch onto this as a good solution. They don't agree to pay security deposits, and pay reduced rent, knowing that the building will be going into foreclosure relatively soon.

But--and you knew this was coming, didn't you--some less-than-scrupulous tenants may be renting these properties, and then letting rooms without telling their roommates that the property will soon be going into foreclosure. So if you're joining a communal household, check it out as carefully as you would renting from an owner-landlord. In areas with a lot of foreclosures, it can be difficult to determine exactly what is going on, as many homeowners are renting out rooms to help make the mortgage payments, so if the tenant passes himself off as an owner, you'll only find that out if you do some homework. Caution! Caution!

8. A new scam coming out of Los Angeles, and reported by a tenant there, is one that will, for the sum of $600, keep you in your soon-to-be-foreclosed home for up to nine months. Those of you who have read this far already know that a tenant has at least seven months from the Notice of Default, so paying $600 for that doesn't make much sense. And I think that the claims of nine months would require that the tenant either be very lucky or proceed through an unlawful detainer after the 90-days' notice expired. That's a really bad idea. Take the seven months; save the $600.

9. And yet another scam. With this one a person entirely unconnected to the foreclosing lender shows up on the doorstep demanding the rent. Yes, it is a scam. You should demand to see some proof of ownership and then, before agreeing to move or paying any money, telephone the loan servicer to determine is the demand is legitimate. And mail the rent payment to the lender; do not hand over checks for large sums of money to people who come knocking at the door. (Contact information for the loan servicer or lender, or both, should be on the Notice of Trustee Sale.)

10. Tenants Together, a statewide tenants' organization, has opened a foreclosure hotline for tenants throughout California who are facing foreclosure. You can telephone 888-495-8020 toll-free any time and, if the line is closed, leave a message (with your daytime contact number) for a return call. Or you can send them an email request here.

11. If you are in military service and your landlord suffers foreclosure, you are eligible for relocation assistance. In addition most base legal services are now entirely conversant with the foreclosure laws of the states where they're located and will be able to provide legal information for tenants.

12. In California, and in many other states, lenders are legally prohibited from doing things like changing the locks and/or shutting off the utilities to "encourage" you to move. If the lender tries this, get help. In many cases local utility services have been dealing with this problem for awhile and will help you to get the utilities turned back on. If the utility company is unhelpful, you should get in touch with a local housing organization or legal aid office. They've also been dealing with this problem for awhile and will be able to help. If the lender changes the locks, call a locksmith, and then have the lock re-keyed. Be sure that you keep documentation of any problem and any money you had to pay for utility restoration or the locksmith. If the lender doesn't refund your money, you can take the lender to Small Claims Court to recover money you had to front. And if the situation is really egregious--if you went for weeks without water, for instance--see a lawyer. In many states that's a constructive eviction and you could be awarded substantial damages.