A new scam has been born with the advent of foreclosure boom. Predatory Renting
“This is an explosion,” said Judith Liben, a lawyer at the Massachusetts Law Reform Institute. “This isn’t business as usual. These are investors that overleveraged themselves, and the renters are collateral damage in the mortgage crisis.”
Real estate flippers and investors are apparently renting their homes, not paying their mortgage and skipping out of town with their renters cash and security deposits. Leaving unsuspecting tenants to suffer and be kicked out on the street, often with only 72 hours to vacate and move their belongings.
Many renters say they never even knew their buildings were heading for foreclosure.-
A new bill passed this last Thursday by the House has protections for renters. Such as requiring new owners to continue the leases of tenants for up to six months after foreclosure.
Senator Christopher Dodd, introduced similar legislation, said “A foreclosure doesn’t’t differentiate between a homeowner and a renter residing in a defaulting property.”
Most state or local laws do not provide this protection and I personally think this will be a huge issue that needs to be addressed immediately.
Here are some excerpts from a New York Times article over the weekend.
Many renters say they never even knew their building was heading for foreclosure.
”This is an explosion,” said Judith Liben, a lawyer at the Massachusetts Law Reform Institute. ”This isn’t business as usual. These are investors that overleveraged themselves, and the renters are collateral damage in the mortgage crisis.”
In Nevada, which has one of the highest foreclosure rates in the country, 28 percent of mortgages that were in default earlier this year were for homes not owner-occupied, more than twice the national average, according to the Mortgage Bankers Association. Arizona and Florida, both leaders in foreclosures, are also well above the national average. In California, 22 percent of the properties lost to foreclosure this year were not owner-occupied, according to ForeclosureRadar.com, which tracks California foreclosure auctions.
Foreclosing lenders typically evict tenants so they can sell the property, said Vicki Vidal, senior director of loan administration and government affairs at the Mortgage Bankers Association.
Sara and Louie Northern, who live in a home that is in foreclosure in a new Las Vegas subdivision far from the Strip, say they have never been late on a rent payment. But each day in their four-bedroom house, they wonder whether this will be the day they get an eviction notice telling them they have 72 hours to leave the property.
”It’s not normal to live like this,” said Louie Northern, 36, a mail carrier.
Renters beware!
{ 4 comments… read them below or add one }
Come on gang! Someone bash the loan officer for renters being abuse by investors renting property!
Why not. We are accused of everything else. How about contaminated water. Can we get that charge too?
Cool. I’ve got a property you can rent. First month’s rent is $5000, next six month’s is a dollar.
Yes, I’m kidding. This bill will worsen things for bankers by making them hold onto properties even longer while they lose money. Not that I have any sympathy for them but this was not a foreseeable risk.
A frightened homeowner signs over his redemption rights to a company who promises to redeem his property for $10,000 above the sheriff sale price, and in the contract agreement the homeowner pays $1305.00 a month until he can refinance the property back into his name at decent rates. Are there laws or guidelines these companies who “redeem” properties must follow?
I just read in Kansas Statutes KSA 60-2414 that a defendant owner has a right of redemption for 12 months from the date of the sale and only has to pay the current holder of the certificate of purchase the amount they paid at the sale to redeem the property,plus the interest at the rate provided for in subsection (e)(1) of KSA 16-204, costs and taxes to the date of redemption. The defendant owner iin the meantime shall be entitled to the possession of the property.
My question is: can the current holder of the certificate of purchase add on charges “fees” on top of the purchase price at the sale to make the redemption price almost %50,000 higher than the amount paid to redeem the property?
Any guidance would be appreciated.
Kelly L. Hansen
ctsmyhon@yahoo.com
504-579-2340