Renters, soldiers feeling foreclosure pain

[UpInArms]

Source: Reuters

LAS VEGAS (Reuters) - The day before her husband was deployed to the Middle East by the U.S. Air Force, Marketa Johnson got word that her family would be evicted from their rented home.

It did not matter that the Johnsons had never missed a rent payment and had signed a two-year lease. The property owner was facing foreclosure and so Johnson simply packed her bags.

But last month, when she got another eviction notice and was ordered to leave her new home, she decided to fight.

"We military are good tenants," said Johnson whose husband, Derrick, is an Air Force pilot. "We always take care of the property. We were never late, never. I don't see a reason that we should not stay there."

The U.S. housing crisis that has caused a spike in foreclosures has meant not only anguish for delinquent mortgage borrowers but heartache for renters in good standing.

Read more: http://www.reuters.com/article/bondsNews/idUSN1345276920080616?sp=true

[MannyGoldstein]

1. That's Really Awful. Please Pass The Grey Poupon.

I guess it sucks to not be a member of The Predator Class in America. Now go do your job and die for your country, while we fuck you over.

:sarcasm:, in case you weren't sure.

[Baby Snooks]

3. Our predatory society

Banks like empty houses. Just the harsh reality. Just the same, some are receptive to allowing a tenant to remain on a month to month basis which actually protects them since vacant homes are open to vandalism and theft and if you are willing to allow the home to be shown and keep it "presentable" they may be willing to allow you to remain. All they can say is no. So it doesn't hurt to ask.

I am really a tenant advocate because in most states the law tends to protect the landlord only. Keep in mind that some landlords, particularly landlords who didn't intend on becoming a landlord such as banks, have had problems with regard to selling a house and then finding they cannot close because the tenant has not vacated. And doesn't intend to. It becomes a nightmare for everyone. Except the tenant.

Laws vary from state to state. Always check with an attorney about what your rights are. Getting an eviction notice, usually a notice to vacate since only a court can evict you, means nothing. It depends on what your lease says. And on what the law in your state says.

The reality of renting a home is that you can find yourself caught up in the foreclosure. Just a reality. Not a nice one.

Hopefully whoever is foreclosing would prefer you stay and allow you to.
Every once in awhile an investor will be looking for homes already leased. Although usualy the banks have explored that market prior to issuing a notice to vacate. Usually they simply want the house put on the market. And want the house vacant.

Again, call the lender. Then call an attorney.

[MannyGoldstein]

4. Our Government Should Protect Our Active-Duty Soldiers From This

Make it clear that any bank that pulls this crap will be audited until their ass bleeds.

[deadmessengers]

6. Why limit it to soldiers?

People who are living up to their end of the lease agreement they signed shouldn't be evicted at all - why should the military get special treatment here?

[silverojo]

9. Exactly.

There need to be laws in place to protect ALL renters.

[Mind_your_head]

2. I really don't understand why tenents in good standing need to be evicted

when a rental goes to foreclosure. SOMEBODY could be getting that rental money....whether it be the bank or whomever would own it after a foreclosure (new owner).

Couldn't the rental money just go into some sort of escrow account until the ownership of the building is eventually sorted out? :shrug:

If renters were allowed to stay in their apartments, I would think that the RENTERs themselves would be in the 'worst situation' (versus the bank or whomever). I mean WHO would they complain to if a pipe burst or something needed fixing?

Can someone explain how that all works?

[happyslug]

5. The problem is who is buying the property and why?

If the property is being bought to be rented out, not a problem. The current tenants just have to sign a new lease. The rent may go up a bit, but given the current market not by much.

You must understand that when you lease out a rental unit, you buy it for a time period, but it is a time period derived from the ownership interest of the landlord in the property. In my home state of Pennsylvania we follow the legal fiction that when a house is foreclosed on, the owner of the property was always the owner of the property NOT the person who mortgaged the property (And whose rights were sold at the Foreclosure Sale). Thus any lease that the landlord entered into became non-existed whenever the house is sold at foreclosure, and as such the tenant has no rights to the house (unlike the situation where the house is sold, in such cases the person who bought the house bought it subject to any claim on the property including the right of the Tenants as set forth in the lease).

The problem is where the bank foreclosed on the property with intention of selling it to a new owner/occupant. In such cases the Bank wants the house vacate, so the new owners can move in quickly. These are where tenants have to move, because the bank wants the house empty so it can be sold quicker (It is believed by most Realtors that people will NOT make an offer on a house if it is unclear when they can move into the house, tenant occupied housing has that problem, empty housing does not).

Now, there is a growing tendency to leave previous owners in the house till it is sold. This is do to the recent increase in metal sales and that if a house is unoccupied it is more likely to be broken into and stripped. This was the same problem rural america faced in the 1930s, many homes were foreclosed on but the bank refused to kick out the previous owners do to the fact once they left, the house tended to deteriorate. I see this more and more often, but the greater tendency is still to kick out the tenants so that any potential buyer can see they can move in as soon as the house is sold not 30-60 days later (as is the case in most eviction proceedings).

[silverojo]

8. My family went through it, so I can explain

When a house goes into foreclosure, it's owned by the bank until the bank can sell it to recoup its losses.

Banks aren't legally allowed to own real estate, so they have to unload foreclosure homes ASAP.

Furthermore, in most (but not all) states, a tenant's lease becomes null and void, because a bank isn't required to take over the lease.

End result: Eviction, no matter how good a tenant you are.

And, if you don't move your stuff out in time, the sheriff can come and evict you--and your stuff is no longer yours.

Welcome to America. :mad:

[electricmonk]

7. My first hand experience with this

I think I told this story here before but maybe not.

Late May last year I ran into my landlord at the bookstore and I asked her if she wanted me to go ahead and give her my rent check to save me a stamp or her a trip by the house. She said no and to go ahead and keep the money since she was losing the house. About a week later a local realtor showed up and said he was representing the bank that now owned the house. He told me that if I moved out before the end of June they would give me $500 or I could wait until I get an eviction notice. He told me if I waited it would probably take about 60 days for it to go through the courts before the sheriff's office shows up.

So I scrambled and moved everything into a storage unit and found a place a crash for a few weeks. I called the guy up 3 times and he never returned my calls. Then one day I was talking to the downstairs tenant and he said they told him we both had to move out at the same time before they would give us the money. In the meantime the gas got turned off so we had cold water only and then a disconnect notice for the water. We went ahead and paid that and since I was screwed out of the $500 I stayed until the closing date on my house. In 6 days I got approved for a loan and found a house and closed in about 22 days.

It's been almost a year and that house is still sitting empty and not even listed for sale.

That was the second apartment in a row that I lived in that the owner lost to foreclosure. First in 2004 then again in 2007.

Edit to add that this is in Virginia. I've read that some states the sheriff can show up in as little as 3 days to put you out.

[Sen. Walter Sobchak]

10. One of my GF's friends is about to get nailed like this

He has been renting a condo in Las Vegas where he is a production designer and splits his time between Las Vegas and Los Angeles. The guy he was renting from owned about ten units and has apprently fled, mortgages unpaid since March and the guy collected two months rent from his units after he stopped payments before he fled with a fortune. (rent*10*2)

In his case the mortgage holder seems to be prepared to do almost anything to keep his unit off the market if the occupant wants to assume the mortgage, he however isn't interested in buying in this market at any price. For the time being he is going to be put up in a suite at the resort he works at until things calm down enough for him to go apartment hunting.