Friday, May 8, 2009

Renters Caught In Squeeze Face Eviction



Where is the justice in THIS?

You rent an apartment or a house. You pay your rent on time every month. The next thing you know, there is a bailiff or a sheriff's deputy at your door serving you an eviction notice and threatening to toss you out - and toss all your worldly belongings on the street.

What's worse, it's absolutely legal.

That's what's happening all across the United States when a landlord defaults on his loan and the mortgage company moves in to reclaim the property. The unsuspecting renter, who has done absolutely nothing wrong, who has paid his rent to the landlord, is the one who suffers.

In New York state, where Deutsche Bank is the worst offender, a state assemblyman is moving to change the law to give renters who face eviction a 90 day grace period. State Sen. Jeff Klein's bill is a good one, but it doesn't go far enough.

The law must be fundamentally changed to give renters legal rights. After all, they are legally obligated to pay the landlord, not the mortgage company. And if they fulfill that legal obligation, they should be permitted to stay in the property.

Of course, the bank still has the right to foreclose and become the new landlord. Perhaps the law should simply transfer the obligations assigned to the landlord to the bank for the time remaining on the contract. But to evict someone who is paying his or her rent is unconscionable, and frankly, should be considered in every state of this Union, criminal.

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Photo credit: http://www.flickr.com/photos/51035774131@N01/38752749/

15 comments:

DangerRus said...

It is horrific to think about being caught in these circumstances and hopefully lawmakers will step up to the plate and inact the necessary legislation to protect responsible citizens who live up to their contractual obligations. It is certainly not productive to eliminate revenue streams on the parts of the banks either. One would think that property management companies would step into the fray and offer services to banks to transition these properties while all parties benefit.

Anonymous said...

I disagree that this should be considered criminal. If the landlord has defaulted the property belongs to the bank, period. If you are a renter and face eviction, well, thems the breaks as they say.

It is not nice, but its not criminal or even immoral. It is however bad business. At the risk of offending someone here I must say that I think the most important device in a civil society is a binding contract. Without agreement between parties there can be no civil society.

A mortgage is a contract, plain and simple. As a renter you also have a contract in the form of a lease. Perhaps the renter should sue the landlord for breach of contract. This would probably be undesirable as the landlord has allready demonstrated that they are insolvent by defaulting on the mortgage.

So I propose this... Perhaps the bank, the landlord, and the renter could come to an agreement. The renter would pay the bank directly, thus preventing the landlord from loosing the property and destroying their credit. Or, the landlord and the bank could agree to transfer the mortgage to the renter, thus everyone's is happy.

The bank gets their money from a reliable former renter, now owner. The landlord has sold a property at no profit, but has preserved their credit rating. And the renter stays in their home, probably at a lower payment then they paid in rent, and is now a happy homeowner with more disposable income that they can spend on home improvements and such.

No bailouts needed, just plain old common sense and good business... Which is exactly why we will never see this happen.

Technoid said...

I think it is a good idea to create such a new law protecting renters. If they can show they paid their rent on time any entity taking over the property should have to honor the existing leases where the renters are in good standing. It just seems fair and just.

HairTwirla said...

Well it seems that many diff paths could take place in this, the first I am thinking of is that if a Landlord has a loan out with a Mortgage company, then there needs to be a Renters Protection Plan so that the Landlord does not take the rent and use it for something other then paying back to the Mortgage, The Landlord would have to show on a Quartly or a Semi Annual Statement showing that all the rent had gone to the Mortgage Comp.
Another part of the Renters Protection Plan also should be that before people move in they have to be made aware that there is a Loan/Mortgage and that there is a Renters Protection Plan in place and there is a Quartly and or Semi Anual Statement posted showing all rent has gone to Loan/Mortgage.
I think the people should come to ask for some type of protection like this its simple and seems fair and can be built upon..
just my two cents

Anonymous said...

It is not the governments business to interfere in private contracts! There should be no laws passed to protect renters. If you think that allowing the government to step in and break contracts where and when they want to is ok, get ready for when that neighbor of yours petitions the governemnt to break your mortgage so they can buy your house and kick you out if they dont happen to like your color, your religion, or how high your grass may grow. This may sound extreme but the goverrment always takes small words and twists them to the extreme.

Anonymous said...

I just don't get it! The income from we reliable, paying renters is income, period! Our contracts and promises should be enforceable to the end, whether the property transfers or not.

The system, which benefits those who can bribe our public elected officials the most, needs to change. When are we going to realize that WE have the ultimate bribe: their votes!

priness heidi said...

Heidi say
Shame on the banks. If they had any sense they would assume responsibilty for the property and then they would make money. If you have renter's that are always on time and don't cause a problem you have a nice income coming in to you every month. Then maybe they wouldn't need another bailout. I'm glad there trying to change the laws on this. There is no reason someone should be thrown out on the street for paying there rent.

Anonymous said...

I thought under Obama everything was going to be fair and lovely and kind? There must be some mistake.

Deborah Young

Anonymous said...

Just have mortgagees (banks) be a party to all leases. It would create some hassle up front, but do good in the long run.

Anonymous said...

I so agree! Your terms of contract should transfer to the agency that takes the money and the property--the bank. As a renter, you should have a clear amount of notice and rights to 1) find a new place 2) get your deposit back immediately to aid you in that 3) be notified that your landlord is behind on the mortgage BEFORE it becomes a difficult situation.

This is particularly poignant for me. I really liked my last landlord. Nice guy BUT I started getting notices in the mail to my landlord, discussing how much he owed on his mortgage and did he want to borrow more money, get an attorney ... yikes ...

I asked about this and no one would tell me anything except that "it was fine."

I got worried, decided that they were lying, and took two months and moved, but no one, not the landlord or the company that managed his property, kept me informed. Two weeks after I moved, his property was officially foreclosed and the bank put it up for sale. Scary stuff. I was lucky.

Technoid said...

Anonymous said...
"It is not the governments business to interfere in private contracts! There should be no laws passed to protect renters."

Those two don't have to be the same thing. We could pass laws that don't over ride contracts that still protect renters. Renters could be informed when a landlord is behind on his mortage, etc. Much could be done to protect renters without throwing out contracts or disregarding them somehow.

Technoid said...

I just realized a good fix for it. Have the lease contain language about this issue. Something where landlord will owe the renter for damages incurred if ever evicted due to foreclosure with the landlord being liable for all costs incurred by the renter. The answer could be as easy as wording in leases. Just an idea.

nancy bas mo 3agram said...

True, the bank isn't doing anything illegal, they have every right to throw the people out. The people could sue the owner because the owner must have gotten notifications about taking the house and and still getting money from those who are renting the property, the owner should've notified the tentants of the situation. Laws are continuously being changed as time goes on and new problems arise. Such as Clarence Gideon, he proved that those who are in need for financial help should get a lawyer, back then this problem was not addressed since nobody has thought of it. Now, with this occurring problem, Congress should pass a law protecting those who rent, just like Gideon protected those in need of financial help.

Andrea said...

Interesting article. One of my closest friends is currently in this exact situation. She, her husband, and 3 children (pregnant with their fourth) are renting a house. They have been paying their rent on time since they moved in several years before. Apparently the management company took off with the payments not paying the owner of the home and now the owner is in forclosure. Therefore, they are having to move on 30 day notice away from the neighborhood and schools that they love.

While I am sad for my friends and it really is a terrible situation, the responsibility and criminal activity is with the management company who should be prosecuted.

Personally I do not want the government to get involved in personal and private business affairs as much as possible. And it really ticks me off that people are getting bailed out of mortgages they have fallen behind for months and those that have struggled to keep on top of their bills may lose their homes. This is a crazy time.

Michael Smith said...

Deepika was the lawyer assigned to our case, who we met with about an hour before we were supposed to be in court. She rules. Totally down to fight for renters' rights, and is realistic about mediation and coming to an agreement. how to delay eviction