Wendy Smith

A year ago, I wrote a post Tenants Rights & Foreclosure that discussed the absence of tenants rights when landlords don't pay their mortgage. Despite the fact that the tenants paid their rent, if the landlord's property was foreclosed upon, the tenant was out of luck.

Effective May 20, 2009 - the Protecting Tenants at Foreclosure Act became law and provides protection for tenants under the aforementioned circumstances.

The main provision, Section 1 (a) provides that a tenant be given 90 days notice to vacate (assuming a bona fide lease).

Who serves the notice? Foreclosure attorneys typically include unknown/known tenants on the summons service list - can the service be construed as notice? Surely a summons is a pretty good indicator that foreclosure looms.

Will foreclosure attorneys automatically give

90-day notice along with service of the summons to tenants?

Legally, I doubt if a lender or foreclosing attorney has the right to submit a notice to vacate until after the foreclosure sale. Even so, perhaps attorneys will play it safe and give notice along with the service of the summons. This is probably the easiest way to notify tenants.

Browse through Section 703 - it would appear investor-buyers are forced to take over Section 8 tenants whether they want to or not. This may hinder short sales

Tenants shopping for a new residence should try to verify the financial stability of the property owner.

Check the amount of equity in the property via public records. When signing a lease, include a clause providing for the possibility of a foreclosure; make a provision that allows the tenant to sue the landlord for moving expenses as well as a clause requiring a landlord to pay all mortgages/debts attached to a property. An ounce of prevention is worth a pound of cure.

While the Act does raise questions and has potential for abuse it is clearly a step in the right direction for tenants that pay rent and are caught between the bank and the landlord in the foreclosure process.

OK, maybe I've been busy lately and distracted but I didn't know about defective Chinese drywall.

http://www.forthepeople.com/defective_chinese_drywall.htm?gclid=CNK81o6F2JgCFQRkswodojvjcQ

Why do we keep importing goods that can and should be manufactured from THIS country?

A Coldwell Banker colleague told me that CB already has [yet another] addendum to their contracts - yes, the CHINESE DRYWALL DISCLOSURE.

I've been to Home Depot with my husband while he bought drywall, I don't remember any tags saying where the drywall was made. Does it smell like rotten eggs right from the get-go or does it have to be installed for a year or two?

Last week when I went grocery shopping; I was determined to buy produce grown in our United States - I found produce from Chile, Costa Rica, Mexico but had to look really close to find produce grown in our soil. There were quite a few items that had no disclosure at all.

Are we still buying toys with lead paint - again, made in China?

I'm not against China; I'm against this country importing goods that can be made in THIS country by workers living in THIS country.

When are we going to say enough is enough?

Many of you may remember this:

First they came for the Jews, and I did not speak out because I was not a Jew. Then they came for the Communists, and I did not speak out because I was not a Communist. Then they came for the trade unionists, and I did not speak out because I was not a trade unionist. Then they came for me, and there was no one left to speak out for me. by the Rev. Martin Niemöller

What's next?

I've met some ungrateful and manipulative people in my life but this guy ranks near the top...

"Sam" contacted me via my website (www.wendysmithrealestate.com) in August '08. He had gotten himself into a real mess with his mortgage payments.

During the initial consultation, I shared my findings and showed Sam that he is upside-down in his home and that the 1100 square feet house was much too small for 2 adults and five children, I suggested to Sam he short sale the house. For the same monthly amount he could rent a house with a back yard for the children, in a nice neighborhood and much more living space. Sam was adamant: unless he could BUY a larger house he wouldn't sell the one he has. OK, well, there was no way he was going to qualify for a new loan.

I agreed to work with him and his lender to negotiate a loan modification. Sam's hardship was a permanent loss of income: his primary source of income had been from foster care; he had since adopted the five foster children. While he still received monthly support for the children the support was less than that paid for foster care.

My job, as I saw it, was to try to negotiate a permanent payment reduction for Sam. At this point, I felt it very noble of Sam to adopt five children and reduced my standard fee by 33% and agreed to a payment plan for the fee.

Anyhow, upon talking to HSBC, it was learned that Sam had not been truthful when queried about his payment history (prior to the current default). There was a history of re-finances and the current loan originated in 2006, had never had 12 consecutive monthly payments. Mmmm, not a good pattern from the lender perspective.

HSBC agreed that if Sam would make just 3 on-time payments, then they would consider a loan modification. The Loss Mitigator and I discussed a permanent rate reduction coupled with an amortization over 40 years rather than 30 years to further reduce the monthly payments.

Sam just had to make 3 payments on time and in December '08 - the loan modification could be put into place.

On December 1st Sam called HSBC. HSBC extended the temporary rate reduction for 18 months. In June 2010, Sam's interest rate will jump back up to the rate & payments he cannot afford.

It was this point Sam decided that I had not done my job and demanded a full refund of the fee (paid by his mother) or else he would file complaints against me. His emails threatened to call the local Board of Realtors, the state licensing commission, the BBB and of course the local TV stations.

Hard to believe! Sam had shot himself in the foot! Instead of a permanent solution, he "negotiated" an extension of the temporary rate reduction. Of course HSBC would agree to that! Then to top it off, he wanted his money back (it wasn't even HIS money).

I've talked to his mom several times. She is embarrassed by Sam's demands and lamented that she tried to raise him to do the right thing. I offered to send her back 50% of the money she paid but with one stipulation: Sam had to agree to not file any complaints and that this entire issue was closed. Sam would not agree.

Earlier this week, Sam contacted the local TV station with a complaint. I don't know if he's called anyone else yet.

This isn't about the money, this is about a person who uses the experience and expertise of a professional and then after the service is done, cries foul and demands a refund.

If only I could take back my services and time. I just got off the phone with his mom; she just got out of the hospital. She's still embarrassed and again apologized. I assured her there are no hard feelings, we chatted awhile and I wished her well. I still feel bad for her.

Have you seen what Citi has done?

http://money.cnn.com/2009/01/09/news/companies/citigroup_legislation/index.htm

Citi is certainly a leader with this announcement. I asked the very thing of WAMU only a few days ago and was told absolutely not - too much room for fraud (fraud as it pertains, she explained, is people that didn't want to continue to pay on mortgages that exceeded the value of the properties)

Bankruptcy judges have long had this right to reduce a note for just about anything other than primary residences....now, well the potential is limitless.

What gets me is that this is a VOLUNTARY action by Citi. I take back all the bad stuff I've always spouted about Citi. Well, almost.

This will be interesting. Imagine the flood of homeowners rushing to file bankruptcy now. Wow.

Some may have already seen this .... I received this in an email today.

Law Of The Garbage Truck One day I hopped in a taxi and we took off for the airport. We were driving in the right lane when suddenly a black car jumped out of a parking space right in front of us. My taxi driver slammed on his brakes, skidded, and missed the other car by just inches! The driver of the other car whipped his head around and started yelling at us. My taxi driver just smiled and waved at the guy. And I mean, he was really friendly. So I asked, 'Why did you just do that? This guy almost ruined your car and sent us to the hospital!' This is when my taxi driver taught me what I now call, 'The Law of the Garbage Truck.' He explained that many people are like garbage trucks. They run around full of garbage, full of frustration, full of failure, full of anger, and full of disappointment. As their internal garbage piles up, they need a place to dump it and sometimes they'll dump it on you. Don't take it personally. Just smile, wave, wish them well, and move on. Whatever you do, don't take their garbage with you and spread it to other people at work, at home, or on the streets. The bottom line is that happy and successful people do not let garbage trucks take over their day. Life's too short to wake up in the morning with regrets, so . . . Love the people who treat you right. Pray for the ones who don't. Life is fifty percent what you make it and fifty percent how you take it! None of it has to be accepted from other people. Have a blessed, garbage-free day!