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Landlady getting Foreclosed on
KiTA
Registered User regular
Registered User regular
So my landlady has been getting mail at the house (she refuses to forward mail to her new location in California) from ReconTrust over the past week. The mail thing was pretty annoying for a while, but ReconTrust set off some red flags, cause apparently they're Bank of America's foreclosure mill.
I also saw this in the paper last week:
-SNIP-
And ReconTrust sent a "To Current Occupant" thing as well with the same contents, which also had a "Notice of Default" paper.
So yeah, looks like it's apartment hunting time. I'm getting stuff out, my roommate left already, etc etc.
I know that I have 90 days from the date of foreclosure -- my question is, what is the date of the foreclosure? When they posted that in the paper? 6/20/11 when it goes up for auction? When they put something on the house?
Is it possible they already did, and the landlord ripped it off before she left?
I could also rent from the bank or whatnot, or maybe make a funny offer on the house at auction...
I guess my question is -- anyone here familiar enough with foreclosure to know when I should be out, other than "as soon as possible?"
(As an aside: Yes, the paper does say they haven't paid the mortgage in 2 and a half years. Any wonder why we have a housing bubble?)
I also saw this in the paper last week:
-SNIP-
And ReconTrust sent a "To Current Occupant" thing as well with the same contents, which also had a "Notice of Default" paper.
So yeah, looks like it's apartment hunting time. I'm getting stuff out, my roommate left already, etc etc.
I know that I have 90 days from the date of foreclosure -- my question is, what is the date of the foreclosure? When they posted that in the paper? 6/20/11 when it goes up for auction? When they put something on the house?
Is it possible they already did, and the landlord ripped it off before she left?
I could also rent from the bank or whatnot, or maybe make a funny offer on the house at auction...
I guess my question is -- anyone here familiar enough with foreclosure to know when I should be out, other than "as soon as possible?"
(As an aside: Yes, the paper does say they haven't paid the mortgage in 2 and a half years. Any wonder why we have a housing bubble?)
KiTA on
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I'd call the bank/company and talk to them about it. They must run into this frequently.
I called the bank, they tried to explain that as a bank, they have the right to claim any private property they want at any time as long as it's near a house they're foreclosing on. Then the nice lady admitted she wasn't in the foreclosure dept and didn't really KNOW, but they're the bank. Don't mess with them. Or something.
Over the 3 or 4 times I've called they've basically said "get out ASAP and don't pay any more rent."
I'm paid up until the end of this month + 1 month's rent as a deposit. If I'm going to pay any more I need to do so in the next week. I'd like to try and ride it all out until May, when the apartments near the college open and I won't need to worry about exams. If she no longer has the power to evict me, however, I fully intend to not pay her a dime -- it's fairly obvious in hindsight that she was skipping town.
My roommate was also pretty interested in something called Cash for Keys, I think one of the reasons he left is because the bank pointed out that since he's not on the lease, it doesn't matter how loud he is at the bank, they're not giving him anything.
Also, you're most likely not going to see your security deposit again, unfortunately. The bank isn't legally obligated to return it to you, as they didn't collect it. You'd have to go after the former landlord in small claims court.
That said if she's an out of town deadbeat maybe she won't bother as the eviction process usually takes a couple months even if you're on top of your shit and does incur out of pocket expense.
As to when to move out, you'll want to do that before the locks get changed out and all the possessions inside get taken. I'm not sure when that happens in the proceedings (e.g. date of auction?, or maybe there must be a formal eviction process of any residents?), and if your status as a tenant changes anything.
So, just ignore her and move out ASAP, right? Am I in danger of coming home to find the doors being locked shut or something?
It is unlikely that you owe the landlady any money at this point, but I would contact the bank ASAP and find out what the situation is.
[Edit]
nm, you did contact the bank. Yeah, if you're paid up, and your lease is up: I'd say get out.
It has a section on foreclosures that outlines your rights as a tenant in this case. The bank may very well not be aware of these laws or may choose to try not to care. I would read it though before you make any drastic choices.
Note that I am not a lawyer and this is not legal advice. Just helpful googeling.
As always in these threads, feel free to PM me and I'll be happy to work through some of this crap.
I'd also advise that you take down that notice in the OP. You don't need that plastered on the internet. I'll have to wait until I'm back in my office tomorrow to get specifics about process, as everything is very state-to-state.
But if you're asking "how long can I live here rent free without risk?", I'm not sure how good an answer I could give you.
She's the only one who could evict you right now (or next month or whenever) should you decide to stop paying rent. Should she elect not to, well that's indefinite to me. Changing out the locks and impounding the possessions is going to cost someone money, so I'd think it'd be the new title holder who'd initiate those proceedings.
Basically I was thinking of it as if I was owner and occupant and being foreclosed on. I'd expect to be able to occupy the house until it was sold to someone else, and then they'd have to go through the eviction process to force me out.
And I'm not familiar with foreclosures, so maybe there's a good reason for this, but if you still plan to try to live in the house till May, why wouldn't you pay the landlady anything?
Move into an actual apartment, with an actual lease, and if you need roommates make sure they are actual human beings. If I'm remembering correctly this is the third or fourth "Help guys, my extremely shady living arrangements have gone to shit" thread you've made in the past year.
No, that's not accurate. I had a thread a few years back when my buddy Darren moved out in a hurry and I had no idea what to do (having never rented or lived on my own), which I unwisely chose to bump when my living situation a few years later got weird and I felt the need to vent. This one hasn't gone sour, but I've gained enough life experience to see it going south, really quickly, in the next few weeks/months. (And yeah, this situation wasn't perfect, but it got me out of a shittier one, so...)
And yeah, that's my current plan, an apartment next to the school. The problem is that until the end of term (May) everything's kinda packed, and I'm trying to figure out if I have to get a not-perfect lease right now, or hold out for a really good one in a month or two.
Don't move out prior to the foreclosure. Because of the common occurrence of this situation, most banks run a "cash for keys" program. Generally they'll give you several hundred to a couple thousand dollars to vacate when served with notice, if you do so in a timely manner and don't trash the place on the way out the door.
Also, holy shit, dude, stop living in shady places.
There's a definite chance of getting some cash out of this through this process. Set something up for July (June FC, right?) but there's no reason to go running if you know what's up. There's actually a good chance of coming out, financially, on the top of this situation. I've seen it and facilitated similar previous through my work (and I've personally handled over 2k individual foreclosure cases from borrower-side).
I don't know. My roommate says the FC was in January, which is why he says he's moving out -- but I'm not sure I trust his sources. The only date I know of is June 20, 2011, which is the auction. I've been told the auction is just the tail end of things.
Someone pointed out the landlady might be intentionally defaulting so a company can buy the house at auction and re-sell it to her immediately. Kinda like Ghetto Warping in FF11 -- sure, you take a penalty, but you get further ahead in the long run.
Ah, yes. The "Foreclosure" most likely began in January. The actual sale is set for 6/20/11. Foreclosure is a (generally) long process lasting, on average but it varies widely stat-to-state, three months. Here, it seems, you have six.
That makes me consider, and this is just suspicion, that the property owner may have been trying to work out a deal with the servicer (bank) to modify the mortgage. Generally delays in the process, these days, can be chalked up to, most commonly, trying to modify the mortgage or state/local laws/rulings which "force" delays in the process (robo-signers, anyone?).
Hah, since you took down the notice... what state is this?
Edit: Generally all notifications of foreclosure are sent out by certified mail to the borrower's mailing address. You, most likely, won't actually see a note taped to the door (except in cases of eviction, but that's another subject).
After the sale has been completed, an eviction process may begin.
That being said, servicers (banks) are often happy to allow persons to remain in homes rent/mortgage free for a variable amount of time as it is far cheaper to rely on a tenant to provide upkeep and maintainable than for it to come out of their own pockets. This has become very common, actually, but it isn't a guarantee. The servicer and investor of the loan can absolutely take possession with a tenant in the home.
The rule of thumb in all these situations is that legal or not, a bank can do whatever they want without reproach.
With that said, after the June sale you'll have one of three things, most likely: 1) eviction, which takes minimum 30 days and varies state by state. The new federal law I believe extends this to a minimum of 90 days, but I haven't looked too closely at it yet (as it really only effects my work tangentially). 2) Cash-for-keys moveout in which the bank generally agrees to provide a payment of anywhere from $500-$5,000 for an orderly move out. You can and should negotiate this if you can. 3) They allow you to live rent free until they decide they want the property.
Generally, the latter two only occur if there exists no buyer at auction. The vast majority of foreclosure sales are of this sort: there's no buyer and the property becomes owned by the bank at which point they try to sell it.
To be cautious, I'd try to ensure that you have a place to go, but at the same time if you're lucky you could get off scott-free without making payments. Understand that you may need to move quickly, and having a couch to crash on for a few weeks while you look for a new living accommodation gives you the best chance of avoiding huge hassle.
I'd also note that there's a fourth option that comes up from time to time in that a bank will take over the role of landlord, allowing you to make rent payments directly to them as opposed to the previous owner. This is dicey and I wouldn't suggest trusting any bank further than you can throw them.
She's also openly told me she's refinancing the house, but never to the extent that she just didn't bother to pay anything for 2 and a half years. I suspect her efforts to refinance are why the house hadn't been foreclosed yet, and her frothy, ranting demands that I not return her mail nor let the bank know about her not living her is all part of that.
This is Idaho state, btw. She is still calling me every few days, I'm not returning her calls nor am I answering the phone -- I'm done speaking with her unless I have to.
If I'm going to pay more rent, it has to be this week, same if I'm going to give written notice. A review of my lease alerts me to a modification she made post-signing but pre-photocopying (it's in different ink, amongst other things) stating a $25 a DAY late fee. While I'm a bit lacking in the ol' common sense at times, not even I would be stupid enough to sign a lease with THAT on it.
So I really, really need to figure out if I need to give notice, or just ignore her until I'm out, or what. I'm still not certain if she's "the landlady" or "the ex landlady of this now ownerless property I'm in". I hate being in limbo.
This is, in fact, impossible. she hasn't made a mortgage payment since 2008. Aside from the fact that her credit is shot to hell, there's no way any company would refinance a loan that is nearly three years delinquent.
It does seem like this was a strategic default. The interest rate, I believe, is around 11.25%, which is usury of the worst sense. Avoiding a foreclosure for three years isn't what happens when you let the process move forward. She has, I would certainly bet, been trying to restructure the loan in a modification.
The bank will know she's not there. They probably already do know this. Aside from it being federal fraud (there's a form called the Dodd-Frank Certification necessary for any sort of workout which certifies truth in statement at the expense of federal penalties), the servicer (bank) will send out individuals to scope out the property and complete a Broker's Price Opinion and ensure occupancy.
Again. A refi is highly, highly, highly unlikely.
You're fine until June. She still owns the property and will until that sale.
With that said, you need to ask her what's up. Ask her if she's trying to do a modification and if she has a "plan B" if that sale gets close. A bankruptcy declaration is one of the only things that halts a sale no-questions-asked (except about the bankruptcy, but that's not the point).
Edit: This woman sounds sketchy as all hell. While you should be safe until at least June, I agree with Bowen that it doesn't sound like a great situation. Red flags are everywhere.
That thing with the lease, that's fraud.
Defaulting on a mortgage and having a third party buy the place at a reduced price to sell back to you, that's fraud as well.
Get away from this person.
For your next lease, I strongly suggest getting something in a multi-unit property or apartment complex. Small-time landlords are hit-and-miss, and if they get foreclosed on, you get fucked as the tenant. On the other hand, even if the owner of a large rental complex gets foreclosed on by the bank, the tenants are typically allowed to stay and keep paying rent.
Rigorous Scholarship
In your place, I'd not pay any more money for any reason whatsoever. As and when your landlady queries this, tell her that you're paying your final month with the security deposit. Do not say this to her until after you have your valuables safely off the property. If she doesn't query it, dont say it. Just go.
The chances of her turning up in person are pretty low - if she's pulling stunts like this then there's a pretty good chance she's done other stuff too. But she might pay (or promise to pay) people to come round and sieze your consumer durables / change the locks / fuck with you in other ways.
I'm living in a property that is in foreclosure right now. It has been in foreclosure since 2008 (as in, the notice of default was delivered to my landlord in 2008). Due to the length of the loan modification process (kicked off by the notice of default), my landlord is still in possession of the property. It's been over two years, and she still owns it. I still pay rent to her, she still has legal ownership and the right to evict for nonpayment.
Pay your rent, speak to your landlord. Do plan to move ASAP. Do not cut all communication with the person whose property you are currently living in.
Well, I am a foreclosure expert and I tend to agree here.
The reason to get out is that the landlord is simply acting in a way that would make any tenant nervous, aside from the foreclosure.
I've set out the most probable paths, here, and the only reason to move would be to get away from this individual's shady dealings.
Agreed. Your advice in this thread is along the same lines as I've received from my real estate attorney in the same situation. KiTA just keeps saying things like
and the answer is that he is not in limbo, she is the landlady until the property is sold at auction or reclaimed by the bank, or until he is told otherwise. Cutting communication is the wrong thing to do.
Exactly. One of the biggest misunderstandings about foreclosure is that it is assumed to be an event, not a process. Foreclosure is a "coded process", not an event. Just as loans are placed into a status of "current" or "delinquent", Foreclosure is the specific long-process a bank takes to recapture the property. In the state in question, this is a judicial process. There is no limbo, the sale has been set and the loan is in foreclosure. Nothing changes in terms of ownership until that sale is confirmed and finalized.
This happened to my wife and I last year. We told the landlord(s) that we would be using our security deposit as last month's rent, and got it in writing that they agreed to it. We also got $2000 from the bank to leave the home in good condition and within 45 days.
Under the Protecting Tenants of Foreclosure Act (I think that's the name), the bank is required to honor your lease if you choose and the house doesn't sell at auction. Like Crowing One said I wouldn't do it, but since banks know that they are more willing to fork over some money to get you to leave.
She is claiming to be going through a company called NACA to refinance.
http://naca.com
http://www.modificationcenter.org/
http://www.naca.com/refinance/refinanceTenStep.jsp
http://en.wikipedia.org/wiki/Neighborhood_Assistance_Corporation_of_America
The quality of the websites set off even more red flags to me. It seems like a con that prays on desperate homeowners, but I don't know. I'm seeing scams everywhere now.
She was very, VERY adamant about me NOT speaking to the bank in any way, even to ask them about what is going on.
I had to call because my former roommate is causing problems, including calling her and telling her I'm destroying the property, living rent free, and planning on stealing the washer/dryer/stove//fridge/etc. Which are all things he's actually suggested doing at one time.
We have had a bank (?) employee come by and talk to us (well, the roommate) about the house. They were just checking to see that it was lived in, safe, etc etc.
Unfortunately I'm not all too familiar with real estate law personally having not been through much of it. Crowing has good advice, keep paying your rent, and do talk to the bank. But also keep looking for a new place to live.
If I were still in the non-profit world I'd shoot you my information. The issue with foreclosure assistance is that you can get a great counselor or a counselor who can barely read. The industry standards are quite lax (and I have all the certifications).
She obviously doesn't know what's up, because she's in the process of getting a modification, not a refinance.
Christ, the goal of any housing counseling in this situation is as much education as it is solution. By leaving the homeowner in the dark NACA really screws up.
Ok, so I don't "have" it yet, but no one's returned an application and I'm going to give them the security deposit tomorrow with the application, which will hold it for me.
Not quite sure what to do with this place. Take photos, get everything into storage, and get the heck out. Should I mail her written notice + the keys? Or just leave the keys here? Give them to the bank? Just a letter, or a registered (have to be signed for) letter?
I'd also like to say that there are upsides and downsides to renting from a multi-unit company. Previous to my current apartment I never rented from anyone other than private landlords and was immensely happy. In many ways the flexibility and human-based response to issues is easier. Of course, when dealing with people, it's always a crapshoot, but private landlords don't deserve the distrust that is being advocated.
You were month-to-month, right? So I assume you're looking at an April 1st move-in-ish? Best of luck!
Yes. It's literally less than a block away from school, too. Only problem is no washer/dryer hookup and electric (baseboard) heat, but I'll live with both. Also: Finding a place for my plant rack will be hard, but not impossible.
It's a month to month lease. My plan at this point is either to mail 1 more month's rent down, or instead mail written notice. In theory, I'd have her father in law come over and do a walkthrough on the last day, but given her track record with that kind of stuff, I'm expecting if I asked today I might get a reply before September.
Hopefully I'll be moved in far, far before April 1st. The apartment has been open for a few weeks now, I'm the first who has brought back a completed app -- and by paying the security deposit early, I have it assuming my background check comes back (and it will).
Problem is, with no credit and an out of state cosigner, they want first and last month's + double security. That's going to make a dent.