YIKES! You've Been Paying Your Rent ~BUT~ Your Landlord Has Not Been Paying the Mortgage!

By
Real Estate Broker/Owner with Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate B.1000860.LLC

I absolutely HATE these calls. I get them 1-2 times a week so I can calm them down and let them know they are NOT alone! I have been noticing this trend also when searching for buyers. When are the banks going to wise up and start cracking down on mortgage fraud? I wonder how many tenants DO NOT know until it is too late!

I am not a vengeful person but sometimes when one gets stuck between a rock and a hard place, that is not a pretty place to be! If you want a little closure, here is some helpful advice:

  • Contact an Attorney: this is a very important step before you do anything!
  • If your security deposit is tied up, file a suit in small claims court.
  • If you want to take it a little further you can find the lender and may want to write them a letter and let them know what has been going on. They may eventually want you to complete an affidavit.
  • If your landlord was acting in the capacity of a real estate licensee or a permitted property manager and you find out they aren't really what they said they were:  contact the Nevada Real Estate Division

Many banks do not have a clue that the homes that are financed as "owner occupied" are actually occupied by tenants. Many tenants may not have a clue that the home they live in is about to be foreclosed on or even in an NOD status (pre foreclosure) and is listed to be sold with instructions to "not disturb tenants."

When are banks going to wake up?

 

 

 

All the Best,
Renee Burrows
Realtor®

Nevada Realty Solutions - Your Dream, Your Investment, You\'re Home!
8942 Spanish Ridge Avenue
Las Vegas, NV 89148
direct: 702-580-1783
fax: 702-995-8237
Renee@ReneeBurrows.com
http://www.ReneeBurrows.com

 

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Thanks,  Renée Burrows 702-580-1783 Broker/Owner, REALTOR®
 

 

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Ambassador
555,118
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Renee...

I had this happen to me many many years ago.

I had no idea I was paying rent on a property that would be foreclosed on.

Once it went back to the bank...I was told I had to leave. It sucked.

Where was AR back then? :)

TLW...ROAR!

Oct 01, 2007 08:13 AM #1
Rainmaker
581,039
Neal Bloom
Premier Associates Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Hi Renee,

I have seen this and it is a big problem here as well. Tough for the banks to figure out unless they physically inspect later. Or audit which they wont because it will cost them too much in legal fees.

As a matter a fact..the house across the street I suspect is going through this. There was a sale then the property showed up on the MLS and we see it as in for-closure. There does not seem to be tenants in there...but a car on the driveway. Could be the exact thing.

Oct 01, 2007 08:25 AM #2
Rainmaker
503,555
Maggie Dokic
Special Miami Homes - Miami, FL
GREEN, CDPE, SFR, Pinecrest | Palmetto Bay |
Renee, I just had a big "DUH!!" moment.  Is that why they put "Do not bother tenants?"  Yikes!!
Oct 01, 2007 08:44 AM #3
Rainmaker
217,080
No Longer Active
Real Estate - Fallon, MT
Renee... This happened to people on my street several years ago.  The owner rented his house with an option to purchase and the "new people" were settled in and seemed to be living there for quite some time before they came to the rude awakening that they had to vacate and lost everything they had put into the home.  Never heard if they were able to recover any of the financial losses.
Oct 01, 2007 09:25 AM #4
Rainer
300,364
Vicente A. Martinez
Prudential Douglas Elliman Licensed Real Estate Salesperson - Woodhaven, NY
Realtor, Brooklyn - Long Island - Queens Homes
Renee with the foreclosure rate so high here in NY I see this happening more and more everyday. Thanks for the tip (I'm going to do some research and see what can be done out here in NY to help protect the unfortunate tenants that are being riped off.) Keep doing what you do
Oct 01, 2007 09:37 AM #5
Rainmaker
420,986
Tom Burris
NMLS# 335055 - Baton Rouge, LA
Texas/Louisiana Mortgage Pro - 13 YRS Experience

If I had a dollar for everytime I have heard that.

Bad deal for the renter.... especially if they are in a rent to own deal with a big down payment. I have seen those too.... makes me sick

Oct 01, 2007 09:46 AM #6
Rainmaker
1,120,282
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc
This is not good Renee. We are going to see it quite often over the next couple of years. I feel for the renters who wake up to a foreclosure notice on the door. It's just a bad thing all the way around.
Oct 01, 2007 11:17 AM #7
Ambassador
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Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate
I've had it happen once. Totally freaked the tenants out. Great post  and good advice what to do.
Oct 01, 2007 11:24 AM #8
Rainer
139,853
Jay McGillicuddy
Berkshire Hathaway HomeServices Verani Realty - Exeter, NH
Real Estate Broker
I saw it in the the last downturn and I'm sure I will see it again. Nice Post..
Oct 01, 2007 02:24 PM #9
Rainer
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Jolynne Photography, Creative Wedding Photography, Family Portraits, Bar Mitzvahs
Jolynne Photography - Hemet, CA
Bat Mitzvahs, Senior Pictures, Event Photography

That's why investment property loans have higher rates and/or fees. And if this becomes too rampant, those fees will only increase based on statistics and risk.

Oct 01, 2007 03:30 PM #10
Ambassador
260,084
Fran Gatti
RE/MAX Coastal Redwoods - Crescent City, CA
Realtor - Crescent City CA Real Estate

Renee,

I had the big duh moment as well.  Thanks for sharing this.

Oct 01, 2007 04:27 PM #11
Rainer
19,954
Membership Cancelled
Pullman, WA
We own rentals and most of our lenders require forms, which state they can collect rents if we get behind. I wonder how this type of thing could happen to renters.
Oct 01, 2007 05:51 PM #12
Rainer
165,557
Dan Forbes
Bradenton, FL

I am afraid that we are going to come across more cases like this.  Thanks for your suggestions.

Thank you for taking the time to read my post, Who or What is Stopping You?, and for making a comment.

Oct 02, 2007 04:05 AM #13
Rainer
110,262
Linda Scanlan
A Fan of AR - Burleson, TX

I wish I'd had this info 20 years ago when this happened to me. I told my husband something wasn't right because our landlord was taking our checks straight to the bank and cashing them, not depositing them.

Sure enough, in about 2 months we got a letter from the mortgage company (I think it was them, either them or an attorney) informing us that we could stay but we would be month to month and the rent was outrageous!

Lost money, had to move quickly and no advice. Great job you did informing people!

Oct 02, 2007 11:08 PM #14
Rainmaker
467,417
Leigh Brown
Leigh Brown & Associates, RE/MAX Executive Realty - Charlotte, NC
CEO, Dream Maker - Charlotte, NC
Craziness-great post and I too think we're going to see more of it.  I've turned down a lot of investor buyers who had great plans for getting owner-occupant loans and never living there.  They just don't get it.  Folks get hurt.
Oct 03, 2007 02:18 AM #15
Rainmaker
586,158
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Renee, I had a "conversation" with a property manager here on AR who "managed" a property in just this circumstance. His position was that he had to enforce the lease even if the owner wasn't making mortgage payments. My advice to all tenants of single residences (not apartments) is that all payments of rent should be through an escrow or licensed property manager and there should be a clause in the lease that the owner keep all mortgage payments, taxes, and insurance current.

The real bad thing about this is that the lender will "evict" the tenants and their record will reflect this unwarranted and unjust eviction.

It is good that you have raised this issue.

Bill Roberts

Oct 03, 2007 02:52 AM #16
Rainer
77,527
Chuck Dellorto
Coldwell Banker - Licensed in INDIANA & ILLINOIS - Dyer, IN
"Talk To Chuck"
Renee - Now that foreclosures are starting to be the norm, this post is great timing to make sure everyone is aware of this potential problem. I had the "duh" moment too. Thanks and take care.
Oct 03, 2007 07:52 AM #17
Ambassador
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The Friendly Home Team
Realty Pro Oregon, LLC - Beaverton, OR
Brokers - Oregon / SW Washington Real Estate
I can't believe people would do this! This is why when I do a lease option I have a escrow company pay everyone including the mortgage company! Non of this crap can happen.
Oct 03, 2007 05:20 PM #18
Ambassador
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Renée Burrows
Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate - Las Vegas, NV
Las Vegas Real Estate Broker - www.urLVhome.com

Oh my my my going back through old posts!

These days landlords are required by law to disclose it (yea right!) and foreclosure notices are PLASTERED on doors & garage doors stating it is unlawful to remove the notice!

Jul 31, 2011 07:28 AM #19
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