C Tann-Starr's Outside Blog

head_left_image

Tenants Victimized By Foreclosures... Sellers Surrounded By REOs and Short Sales...

Tenants Victimized By Foreclosures... I have been having this conversation a lot lately. It gives me chest pains because people usually call in a panic about the Sheriff showing up and informing them they have to vacate the premises.

I don't do rentals anymore. The drama is not conducive to my peace of mind and emotions run very high when there are babies at stake. Sometimes it is very hard being a buyer's broker and having to explain your business model to someone who wants or has to move now. It's not like I have a prepared speech or anything. I talk to individual people on an individual basis. Every situation is unique and the foreclosure stories are horrifying.

Sometimes I think I need a shrink to deal with other people's problems. Anger management would be nice as well. Landlords who collect rent and piss away the mortgage payments stranding innocent families piss me off. I don't think I can ever find the words to tell you how hellacious that kind of feeling really is. 

Moments like these make me want to get the hell out of real estate... Seriously...You'd think the bank would make some sort of specialized unit to notify tenants when a home is foreclosed upon so they can stop paying landlords who don't own the friggin' building anymore. Yeah, crap like that happens up here, among other things...

What about the sellers? How about the homeowners who never did anything wrong, paid their mortgages and can't get a fair market bid on their homes because they are surrounded by people in pre-foreclosure short selling away as if it's the new stock option instead of giving the open market a shot of recovering. Why are agents so damn quick to do a short sale with a property barely 30 days on the market? Why can't more of them try to sell the home for just under market value so people can start over instead of still having to owe? The foreclosure process up here takes approximately 12 to 15 months so why rush to short the property? I am not against short sales, I'm just against it being the first option without at least trying to get the owner some sort of relief...

I keep thinking constantly shorting properties is harming rather then helping. What say you?

 

 

 

Disclaimer: Any comments and contributions provided on ActiveRain.com (or other electronic or print media) does not establish an agency relationship with any third party. Blog posts are intended to be informational only. Please be advised that real estate practices vary in regions and from state to state and market to market. The information contained herein does not constitute legal advice. All parties in need of legal, accounting, tax, or real estate guidance are directed to consult with the licensed professional of their choice. Please seek specific guidance from a retained professional in the specific field(s) required to service your interests. I and/or team blog writers make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this web site and its associated sites inclusive of but not limited to CarolynTannStarr.com MySpace/TannStarr 46486 NY Working Moms Examiner ActiveRain Group Club Chaos ClubChaosAgents.com CyberMinions.net CTannStarr Outside Blog CTannStarr Localism Blog TannStarr.net UberMental.com

© Carolyn Tann-Starr, 2008-2015. Unauthorized use and/or duplication of this material without express and written permission from the re-blog authors (when appropriate)and Carolyn Tann-Starr is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Carolyn Tann-Starr, (the re-blog authors when appropriate) and Wordy C's Blog with appropriate and specific direction to the original content.

 

Carolyn Tann-Starr Outside Blog Outside Blog Minion Report on Facebook Carolyn Tann-Starr on Blogger  CTannStarr on Twitter Tann Starr on YouTube TannStarr.net

Tann Starr on iTunes

Tann Starr on IMDb

Kim Harrison  Vicki Pettersson  Jocelynn Drake  Jaye Wells  Amy DeZellar  Lynn Rush  Jeannie Holmes

Ward Nasse Gallery

Kendall Grey  Jeaniene Frost  Faith Hunter  Stacia Kane  Sherry Soule

Alicia Anderson: Touched By People Places and Things

CarolynTannStarr.com

Tann Starr on Amazon.com

Life With Wee People

Outside Blog Minion Report

MySpace

Ask me something...

Tann Starr on Jango Music

Tann Starr on Blip.fm

Felix Lipov, Official Photographer, Ambassadors of Chaos

 

 

 

Comment balloon 37 commentsC Tann-Starr • August 26 2009 07:25PM

Comments

C - It's a real travesty and so sad to see the many families that are dealt a blow like this.  I wish there were some kind of recourse to help those families that are caught in the middle between the lender and the owner.

Posted by Donna Bigda, Greater New Haven CT Real Estate (RE/MAX Alliance) about 9 years ago

C- The title of the blog is so 2008. I can't wait to make "it" sound like a thing of the past!

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) about 9 years ago

I have a client right now struggling with this.  I just think there should be something present to protect tenants who have been paying rent faithfully and who've done nothing wrong.

If you need a "shrink" call me!

Posted by Dr. Stacey-Ann Baugh, A doctor who makes house calls. (Century 21 New Millennium) about 9 years ago

Donna, so do I. I don't understand why there isn't a Federal law somewhere about notifying tenants in a timely manner when the mortgage is going south so they can prepare for the worst if the worst is upon them. Being the last one to know really sucks. Where are their security deposits? Gone... A lot of people live check to check and if they knew the landlord wasn't their landlord anymore they would most certainly be holding onto their money to pay the correct person to give them time to relocate or negotiate a new lease.

One of my friends saw a for rent by owner sign and signed a lease and gave the owner of a two family $3000 in cash for a three bedroom apartment. The S.O.B. was in the last stages of foreclosure and failed to mention that. My friend called and asked me to find out about the building. It was for sale. It had a Lis pendens on it. The owner was going to get the boot within 60 days. An auction date was set. Do you have any idea what kind of crap we went through to get her money back? Geez... I can go on and on about this. Victims are everywhere...

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

LOL @ Greg. It my be 2007ish as well. The bubble burst and crap went south before I got my license. I remember it well, my friend. I kept thinking I went to school for this??? Real Estate Paralegal??? WTF???  (LMAO)

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

Stacey-Ann, some type of grace and common sense is in order. A lot of people are hurting right now. I am tired of being the bad guy if I can't help everyone who calls me. It's frustrating because you may really want to help but have nothing for them. Some NYC rents are higher than a damn mortgage.

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

I wish I had some of the options you spoke of - instead I have a renter 3 months behind. How many months can I afford $XXXX for that mortgage too? Should I wait until they catch up to pay the mortgage? No I've paid it without their rent. But I can't tell you I haven't thought of letting that thing ride ... I would have sold it months ago if I could have even brought a couple thousand to the table. I'm sorry, I can't afford to bring $40,000 to the table. Everyone is up a creek. Ok I'm done venting too - thanks for givin' me a place to rant.

Posted by Stephen Kappre, Helping You Home (KW Hometown) about 9 years ago

Steve, that totally whomps. I am sorry you are going through this. Rant away, my friend... seems like everyone is feeling it one way or the other...

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

Little sister - I can relate to your venting and post, I am sorry everyone but I don't do short sales and very few REOs. I try to focus on Vacant Land (Commercial & Residential) and Commercial properties.

Thanks for the read sis!

             

Posted by Robert Vegas Bob Swetz, Las Vegas Henderson Homes for Sale (Realty ONE Group) about 9 years ago

Big Brother, you are very fortunate in that regard. God bless you. :-)

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

Oooooo. I just got an e-mail with this link:

http://floridaassetprotection.blogs.com/alperlaw/2009/08/mortgage-foreclosure-defenses-using-new-tenant-protection-laws.html

Yall have got to read this mess... Wow... That totally whomps...

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

There are programs in place so that tenants are not forced out of their homes if they have a valid lease.  Check with the different lenders and you will find out their policy.

Posted by Pat Fenn (Marketing Specialist for CJ Realty Group/Cindy Jones Broker ) about 9 years ago

Thank you, Pat. That's why they sent me that link I posted in the comments section. Seems people are playing games with that provision, which is causing a wee bit of trouble.

Some lenders want the place vacated in 90 days.

Some do cash for keys.

Others let them stay and state they will not do repairs further informing the tenant that if they wish to remain they have to make the place properly habitable. A Realtor called me from out of state because she had a valid lease but asked about mold remediation which sparked her eviction since the bank claimed the place was no longer habitable. Go figure...

There seems to be a lot of ways to get around the valid lease provision... What does a tenant do when the bank wants a place fully gutted and renovated? In NYC if a landlord claims they want your apartment or rental for a family member, you have to move at the end of your lease. No option to renew if you need your property for family. That appears to include a rent stabilized apartment as well... The family can jet when ever they want but the tenant is out of a home.

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

We have had to help a few tenants pick up the pieces and buy a move after they had been in a rental where the owner was not paying the mortgage -- only to find out when they had someone post a foreclosure notice to the door. And yes, there were small children involved. Not so good.

Posted by Bob & Carolin Benjamin, East Phoenix Arizona Homes (Benjamin Realty LLC) about 9 years ago

Was just warning someone yesterday about this possibility in a rent with option deal they were doing.  Oh yeah just pay me the amount of my mortgage and I will send it on to bank until you are ready to buy.  Right!!!! It is a sin C!

Posted by Paddy (Patricia) Pizappi, Real Estate Associate Broker Hudson Valley NY (Better Homes and Gardens Rand Realty) about 9 years ago

I agree that shorting hurts, but not as much as a REO next door. Tell everyone you know who rents to read the legal notices and stay ahead of the curve. Tell anyone you know who is about to rent to check the paper or court house to avoid a problem.

Posted by Tom Bailey about 9 years ago

The whole thing is bad no matter how we slice it. Sellers can't compete with banks and poor tenants are finding out left and right that their rent was wasted. There are a lot of buyers out there getting some great deals, but it would be nice to see stability.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) about 9 years ago

In California, when a home is going to auction, the lender posts a notice on the door beforehand. The notice reflects the date, place and time of the trustee's sale. At least tenants in California are informed. Then, they have 90 days to move after the auction or, if they have a lease, the lease governs the remaining time in the property.

I don't know what you mean, though, about doing a short sale when the home hasn't been on the market for 30 days.

sacramento short sale agent

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) about 9 years ago

In your market it may make sense to take your time with the short sale.  However, I think the short sale agents want to get it in to the bank with an offer ASAP because it could take months to get the banks OK on the short sale.  I think you have to look at each individual situation.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) about 9 years ago

I have to say that I have seen plenty of tenants taking advantage of the bad situations as well. Many have stopped paying rent on the home because it is going into foreclosure. They feel the owners are not paying why should I. While it does seem unfair, tenants sign leases with the owners not banks and still have the obligation to pay their rent on time every month.

Posted by James Lyon (Vista Pacific Realty) about 9 years ago

Congrats on feature post! yes this is a real sad situation for tenants who have done nothing wrong. thanks for sharing

Posted by Ginger Moore (Wilkinson & Associates Realty) about 9 years ago

C - Congrats on the feature!  You go, girl.  I think we are seeing the first signs of recovery, here.  Hopefully, things will level out.  It is too sad.

Posted by Margaret Mitchell, Seacoast Maine & NH Real Estate (Coldwell Banker Yorke Realty) about 9 years ago

I was pretty flabbergasted by the owner who accepted rent & deposit from a prospective tenant when he was already in foreclosure. No idea if they were evil jerks or if they hoped the rent would help them bring in enough money to forestall the foreclosure? From what you say, it does make sense to check the property first if you are going to move into a new rental.

That said, I wonder how many days notice there are when the foreclosure notice is posted at the property? Is it less than 30 days? If it is less than 30 days, then clearly a change in law should be implemented so any affected person at the home would have that time to get ready to move.

 

 

Posted by Pangaea Interior Design Kitchen & Bath Design, Remodeling (Portland Oregon) about 9 years ago

Bob and Carolin, I have to meet with a young lady who is now in a shelter because of what the landlord failed to do. Imagine having a decent job but having to take emergency shelter while hunting for a place to live. She doesn't want to rent anymore. I do not blame her...

Paddy, I now tell people if they want to rent with the option to buy I am not the broker for them. They become an instant referral to someone else. I don't want to be in the middle of this type of drama. It frustrates me beyond belief...

Tom, REOs are becoming a normal part of my day, which is a very sad commentary regarding the state of my industry.

JL, I have been praying for stability because a lot of people can not make a decent living. This market whomps. Decent landlords struggle with late or no payments from tenants; decent tenants struggle with landlords who bail. The drama goes both ways. I have a seller who dropped off the face of the earth and I can't process an offer because I can't find the owner. Geez... What the heck is next?

Elizabeth, I showed a nice home the owner was asking $299K for. I had a buyer who didn't like Shorts or REOs because they had been disappointed before after "waiting forever" to get an answer. The buyer liked the home and wanted the other sister to see it before she signed the binder because they would be living together. The home was a just listed one. Told the broker my buyer was coming back in three days for a second look and the broker said I am going to turn the home into a short sale. I asked the broker not to do it yet because my buyer was willing to pay the $299K but would walk if it wasn't a straight sale without third party approval. The broker did not wait for the offer to be written (three weeks on the market mind you). Same day I am on location waiting for the other relative to arrive I get the call: "Great news. Tell your buyer $269K. Price reduction - short sale." Both buyers walked the moment I informed them of the $20k decrease in asking price. Didn't blink an eye. Was not happy about saving this money. Walked. They viewed the shorts as an indicator of a declining neighborhood. I lost two buyers with one phone call because the broker couldn't wait three days. Home was not on the market a month and the broker shorted the damn property for a quick sale. If people perceive there is no value because a home is too cheap they will not buy it. They would rather pay a few dollars more for the stability of a "good neighborhood" (perception is reality) than buy a bargain only to discover being surrounded by Shorts and REOs will make their property values decline further. One week later another one of my buyers who brought a home one block down from the one I almost sold told me the bank demanded a 10% down payment minimum because there were so many shorts and REOs they were zoning the area as a declining market. My mouth fell open... I have been telling my friends to list just under market value and accept the first offer rather than immediately short the property. Take a crack and getting the seller some money so they can start over rather than still owe. I'd rather negotiate a low offer higher than short when there is time to move the listing. That's just me...

Gene, valid point and I understand that but if they didn't have a third party approval the seller could just say yes or no and we can close escrow in a timely manner without the third party delays.

James, tenants really do need to honor their contracts because it is the right thing to do. They are in possession of the housing and should pay their rent obligations. I know times are tough and people do fall behind. The rent needs to be caught up and paid if someone falls behind.

Thank you, Ginger. :-)

 

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

Margaret, it makes for a fascinating conversation that really tugs on the heartstrings because people are so betrayed and hurt on both sides when they are doing the best that they can and it goes south without warning. The hardest thing is watching bad tenants tear up a landlord's home, not pay, drag the eviction process out and jeopardize the owner's ability to maintain their property. It whomps to see young couples thinking they have an equity stake in a building that they do the repairs to themselves because they are promised a rent with the option to buy when the landlord is bailing because of the previous bad experience. It's like a vicious cycle... People give up or get even with the wrong people because they feel entitled to something they have no business being entitled to... I get so many strange stories from people there are days I don't want to answer my office or cell phone (LOL).

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

Everyone does the best they can from whatever state of consciousness they are at. That is the pity. But pity doesn't help. Sounds like some good ideas here. I just did a "short sale" search for a buyer and I had to switch to something else because I look at the homes, see the swing sets, etc. and know there is human suffering. Be well, Janice

Posted by Janice Roosevelt, OICP ABR, ePRO,Ecobroker ( Keller Williams Brandywine Valley ) about 9 years ago

This may only be the tip of the iceberg. The real pain is coming. There are millions of mortgages about to reset. With the capital markets still not lending; many people who are underwater will have no way to avoid bankruptcy or foreclosure. Short sales are only a short term solution. Would be better to keep the family in the properties-have them pay rent. If they cannot or wont pay it as a rental then kick them out. This tide of short sales have got to stop. The market for homes will not stabilize; until true market forces of supply and demand take over. The idea of the buyers credit is a good idea-it should be continued for another year.

Posted by Al Dobbs (ADD Real Estate) about 9 years ago

We just moved from So California to No California and leased out our house down south.  We leased it to a family in the neighborhood who had been renting and found out the house was in foreclosure.  No notice on the door, they did a little research because of non responsive landlords.

The first thing I told them was to check the courthouse on my house as well as title to reassure them that we were not late or in foreclosure.  Being gunshy, they appreciated the offer.

Foreclosures and short sales have both been in my old neighborhood, but it is a well liked area with great schools.  The market prices have fallen, but not much more then if the market had been normal for the past 5 years instead of running up way too high.

I would not rent a house up here though, just because of this issue, found a 3 bdrm apartment instead and will wait it out until we are in a position to buy another property. I can really feel for both the tenants and the owners in this situation.

Barbara

Posted by Barbara Singleterry, Honesty - Integrity- Loyalty (S Squared Group - Keller Williams Realty) about 9 years ago

C - I shouldn't even get started here because it is a nightmare here in CA too.  Especially the short sale listing that is listed 25% or more below market value....and needlessly so!  There is such a shortage of starter homes that there is easily 10 buyers for a fairly priced property in the first few days.  Why totally slash it? Now we have 100 buyers lined up thinking they might actually be able to afford this home and do not understand when we tell them that the house is going to sell for much higher. 

Just hold an auction already. Our FHA buyers and regular sellers are already beat up enough!

Posted by Cristal Drake, Realtor - Fullerton Real Estate (Prudential California Realty) about 9 years ago

Janice, it really is hard... I find it emotionally exhausting sometimes...

Al, I am with you. I too believe the "real pain" is around the corner and down the block.

Barbara, I feel for them too, which is why I get so frustrated at times.

Cristal, I am with you 100%. Why slash and burn, eventually crashing the neighborhood's pricing scheme? Why not price it more appropriately while still conveying some tangible savings? Pricing under-market still produces equity for buyers. A ridiculously low price negatively impacts the neighbors ability to get a fair deal. Homeowners who have done nothing wrong are struggling to compete in a market that really whomps.

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

I agree, it seems short sales to be the 'easiest' way out for some.  Others in the neighborhood are left holding their past equity in their (cajones) hands wondering what happened. 

I belong to a landlord agency that has really been pissing me off lately about this and I've taken the side of the tenants.  The agency was sending out in a newsletter to the 'looser landlords' wording that it's none of the tenants business what they do with the rent. The tenants also don't have any 'right' to know if they are behind on payments. Well, there I totally disagree.  Who wants the sheriff sitting on your front steps if it has nothing to do with you? Why traumatize the tenants kids with this stuff?  If you've ever seen the eviction crew you know what I mean!  They don't send the smallest boys in the neighborhood, at least not in Chicago.

I've also recently had a court case won where the tenant was looking for the landlord since 2005 to get his security deposit back.  I helped the tenant, my company keeps asking me why I get involved and why bother?  Well, because the landlord is a thief and it's the right thing to do.  Sorry if they don't feel the same way.  Now the landlords attorney wants to sue me for defamation.  We'll if you've run away with someones money, we won in court, what's not true about the situation?

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) about 9 years ago

C - I just posted about this the other day. Have a teacher of all things living in a rental that is managed by a brokerage. Did anyone tell her the home she's renting was foreclosed. Nope. She started asking my Dad where she can recover her security deposit, can we help her find a new home close to existing schools because she has kids...I felt SO bad.

Posted by Christianne O'Malley, Exceptional Service - Delivering Results in Reno! (RE/MAX Realty Affiliates) about 9 years ago

Lyn, good for you. I am in the middle of a couple of battles right now just because I wrote this (LOL). People need help. I'm trying to help them but the situation really whomps and I have no intention of doing any rentals... I am done with that and am telling everyone their attorney is their best advocate, not me. I am sticking with being a buyer's broker. Period.

Christianne, I am so sorry to hear this. Wishing you the very best with your project.  

 

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

Wow C. That is terrible that these people are not notifying their tenants.

Posted by Mark Velasco, Listing Agent-Whittier & Surrounding ciities (Sharpstone Realty, Inc) about 9 years ago

Mark, it really is terrible and makes my life a living hell when I have to sit there like a therapist and wade through some serious emotions only to refer them somewhere else because I am swamped with the clients and customers I currently have and do not do rentals. I had to stop. The drama is amazing...

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

As long as we keep shorting; the market will not be stablized. We professional have to strive to make this market stable. By selling properties for value. If we keep hurting the neighbors by shorting houses--the market will take years to be in balance.

Posted by Al Dobbs (ADD Real Estate) almost 9 years ago

Al, it really is an uphill battle. I hope I can survive the next two years because if shorts become the norm I may have to find something else to do. The banks really whomp at giving a timely answer. Buyers are tired of waiting 30 plus days to find out if they have an accepted offer or not.

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) almost 9 years ago

Participate