Posted by Hugh Nations Signing Agents of Austin on 11/22/07 11:20pm
Msg #222528
News aspect of the mortgage crisis
From a recent NY Times story on an aspect of the mortgage crisis we haven't seen much about.
LAS VEGAS — In the foreclosure crisis of 2007, thousands of American families are losing their homes without ever missing a payment. They are renters in houses whose owners default on their mortgages — a large but little noticed class of casualties.
Some live in big apartments, others in houses owned by small investors who got in over their heads.
There are no exact figures for how many renters have been evicted because of foreclosures, but a survey taken this year by the Mortgage Bankers Association found that one in seven foreclosures was non-owner-occupied. This figure probably underestimates the problem, according to the association, because buildings receive tax benefits if they are registered as owner-occupied. More than one million properties are expected to enter foreclosure this year.
EDIT
The House on Thursday passed a broad mortgage act that includes protections for renters. The House act, which the lending industry has opposed, would require new owners to continue the leases of tenants for up to six months after foreclosure.
Senator Christopher J. Dodd, Democrat of Connecticut, who introduced similar legislation in the Senate, said in a statement, “A foreclosure doesn’t differentiate between a homeowner and a renter residing in a defaulting property.” Currently, most state or local laws do not provide this protection.
In a statement, the White House said it opposed a number of provisions in the House mortgage bill, but did not single out protection to renters.
EDIT
The House bill calls for new owners — usually lenders — to give tenants a 90-day notice before foreclosure, then continue leases for up to six months after. Renters without leases would have 90 days to leave the property. In Clark County, renters who receive federal housing subsidies and have valid leases continue their arrangement with the new owner. Others get three-day notices to vacate.
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Reply by Carmi/CA on 11/23/07 12:55am
Msg #222538
Most of the time, the rent is only half of the mortgage payment. There are also other things to consider such as property taxes, HOA dues, insurances and unexpected expenses.
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Reply by Kevin/Ct on 11/23/07 5:20am
Msg #222541
I perform foreclosure actions in Connecticut. I really am not to sure why the federal government feels it necessary to provide the 90 day notice since the lessors have to be included in the forclosure action as defendants in order to foreclose their leasehold interest in the property. There are relatively few defenses to a foreclosure action, and the system is designed to proceed rapidly. Few cases result in a trial. Most defendants are defaulted for failure to appear, failure to plead or failure to disclose a defense after which a judgment after default is entered. The entire process takes longer than 90 days in most cases. I have rarely seen a foreclosure action with a following order to eject a defendant from possession come to fruition in less than a year following the filing of the case.
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Reply by Signing_Doc on 11/23/07 6:54am
Msg #222545
This is EXACTLY why we have to move to Mesa AZ...we were in
a home on a "rent to own". Our 'rent payment' was calculated monthly to pay the 1st and 2nd of THEIR mortgage. They were responsible for paying the HOA, but in essence WE were paying the mortgage FOR them. The problem was that we were sending the checks dutifully monthly to them.....and they were merrily spending them to live on...not paying the mortgage company. They had 3 other houses in the Las Vegas area on which they did the same thing.
The main difference between US and the other renters was the "rent to own" aspect. We gave them a LARGE deposit on the house when we moved it (which was going to go against the later purchase price) and, when we were 'evicted' we LOST it. We didn't find out about the foreclosure from the owners but from a door hanger of a person trying to buy the property. We investigated with Clark County and found Pre-foreclosure notices on ALL the houses this couple owned. We tried to work out a 'short sale' with the mortgage company, but they would not budge. The HOA cut the water to the house after about 1 month (yes they also didn't pay the HOA either) and we were forced to flee (stinky selves and all).
We are now going to talk with our Pre-Paid legal people to see if we can sue the previous owners for the large deposit we are due. We talked to the former owners and they refuse. So a 90 day or so notice would have been nice (fortunately we were hip to the process and were able to get the info ourselves).
The former owners were "on paper" millionaires but hadn't a nickle to their name. They were living in a home in Utah (and have since moved I understand). Just information in case anyone was interested. "Doc"
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