Foreclosure in 93619>Question Details

Blackgarnets, Renter in 93619

I am a renter on a piece of property that is being sold as a short sale. Owner is worth millions, how can he get away with this?

Asked by Blackgarnets, 93619 Fri Jan 20, 2012

The short sale was supposedly preapproved because of a medical hardship. Though owner does have a medical hardship it doesn't seem to interfer with him managing his other 50 pieces of property. He made a bad investment now is trying to get out from under the loan because of the declining market. Property is now in early foreclosure with an offer pending. I don't feel a person should be able to get away with this type of bailout from a mortgage company when they have the assets and income to pay on his mortgage debts. What can I do to report this fraudulent negotiation? For the last 18 months I thought my rent was going to make the payments on this property, but apparently, owner kept income for himself and is now in default of approximately 44,000. The property should go into foreclosure or owner should file bankruptcy.

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During short sale negotiations the bank will verify the owners' financial status and, if he can afford to pay the mortgage or make up the short fall, then he will be forced to do so. Or, the bank can foreclose, the thing is it is very expensive to foreclose and the bank often experiences less of a loss if they go along with the short sale than if they foreclose. And, it is not fraudulent for the owner to keep the rent. As long as he is the legal owner he is legally entitled to collect the rent whether he pays the mortgage or not. The mortgage is a contract, which is a private agreement to repay a loan, but it has nothing to do with 'law'. The LAW says that if he doesn't pay the mortgage, the bank has the right to foreclose and take the property back in order to sell it and satisfy the loan.

I know you are upset, but none of us knows what your landlord's true financial situation really is. Fortunes have been lost during this economic downturn and a medical hardship could easily cause such a loss. Be very careful about reporting anything to anyone unless you know beyond a doubt what the true circumstances are. Otherwise YOU could be held liable for potential charges of slander and libel. I know this is frustrating for you, but this is between your landlord and the bank. Take care of yourself and your family, that is your first priority, and let it go.
0 votes Thank Flag Link Sat Jan 21, 2012
Frankly - this doesn't seem like any of your business.
You dont know your landlord is acting fraudulently. Not only the poor get approved for short sales. If he can negotiate a short sale with his lender - good for him. It's really no concern of yours. Your lease runs with the property, not the owner...so this doesnt affect you at all. I would say focus on your own life and not your landlords pocketbook.
Web Reference: http://www.homesbyminna.com
1 vote Thank Flag Link Tue Jan 24, 2012
As Suzanne mentioned, the landlord collecting rent is perfectly legal. Whether they choose to pay the mortgage or not is irrelevant to your obligation. You should review your lease / terms to see what your options are with regards to time-frames and the sale of the property.

However, you have a few options and may want to consult an attorney for confirmation and ramifications. First, you can try to negotiate with the landlord for a reduced rent until it sells or to complete your lease. Of course, they don't need to drop the rent, but may do so to keep you there, have you happy about your situation, and will give them peace of mind that you will take care for the property. Second, you could leave/breach your contract and hope he can't be bothered coming after you. You would be liable in Small Claims court if they sue for unpaid rents. Third, you could stop paying and force them to evict you. This could result in a court action and an eviction on your credit report. They judge will have no sympathy on you that they are not paying the mortgage. That is totally irrelevant to the contract you signed promising to pay. You could also be liable for damages.

I would recommend that you talk to the landlord and tell him your frustrated and that you know he is not paying. See if they are willing to work with you or give you a discount. One other thing to consider is if you think you are going to get your deposit back? If you don't think so, you will either need to take small claims action or use the security as last months rent, which most leases state that they do not allow. When you do move out, they have exactly 21 days to return your deposit or give you an itemization of what they deducted.

Make sure to read and understand your lease and terms. ALSO, TAKE TONS OF PICTURES WHEN YOU DO LEAVE! They are invaluable in any court case with regards to security deposits! You should also review your rights in the California Tenants Handbook - http://www.dca.ca.gov/publications/landlordbook/catenant.pdf

GOOD LUCK and feel free to contact me with any questions.
Web Reference: http://www.323-look.com
0 votes Thank Flag Link Sun Jan 22, 2012
I'm a little confused. You start out describing this situation as a short sale and then convert it to a foreclosure. Which one is it or am I missing something?
0 votes Thank Flag Link Sat Jan 21, 2012
You don't state that there has been an offer made on the property. In a conventional short sale, the owner has not been accepted for a short sale until there is an offer made, then a final decision is made, whether or not the bank will accept a short sale, and for how much.....in some states (called 'recourse' states) even after a short sale, the bank may sue the former owner personally for the deficiency.....

The important thing here is that you honor your obligation, which is to keep the property in good condition and pay the rent!

Hope this helps
0 votes Thank Flag Link Sat Jan 21, 2012
Did the bank deal with this owner in good faith when he approached them to adjust the mortgage?
Did the bank keep their promise to refinance in five years when the owner initially took out the mortgage?
Did the bank deal honestly with the owner or offer honest options when asked for a modification?
Did the bank accept responsibility for steering the owner into a zero interest balloon when he was clearly eligible and would have greatly benefited from a fixed rate mortgage?

Folks who are 'worth millions' become so by looking after their assets and making strategic decisions the keep their wealth from eroding. This owner is giving the bank the same choice.
The bank can carry this to forecloseure and take the loss. (if any really exists, that 900 billing went somewhere)
The bank can grant a short sale and reduce thier suggested loss a bit.
The bank can and should adjust the principle and refinance the home.
The choice is the banks.

Don't blame the citizen. The problem is and has always been the banks failing to operate in good faith.
Web Reference: http://www.MyDunedin.com
0 votes Thank Flag Link Sat Jan 21, 2012
The rich always seem to find loop holes!
0 votes Thank Flag Link Sat Jan 21, 2012
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