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Asked by M, San Francisco, CA Tue Jul 1, 2008

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Lisa Cartola…, Agent, Oakland, CA
Thu Jul 3, 2008

Sorry to hear that you are in this situation.

If you were to purchase the property you would be responsible for all back payments and taxes as well as the purchase price for the unit. I would contact a Realtor to help you determine the current market value of your unit. You may decide that purchasing the property may not be your best option. And as already mentioned, all this aside, you will need to be able to qualify for a loan and be able to make the payments. I would contact a lender immediately to see what kind of loan you could qualify for.

In terms of eviction, the bank, once they own the property typically have the right to evict tenants with a 30 day written notice.

I would contact the rent board to futher find out what you rights and options are. Here is a link to the San Francisco Rental Board:

Lisa Cartolano
Alain Pinel Realtors
Web Reference:
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Jed Lane, Agent, Petaluma, CA
Wed Jul 2, 2008
If I read your question correctly your landlord has sent you notice that he is in default on his mortgage and the bank is foreclosing on the property.
As a tenant in SF you have many rights that you wouldn't have in other areas. Contact the rent board to know what those are.
Now for you to be able to buy the property you would need to qaulify for a new loan and be able to afford the paymnets. Sounds like a duh but obviously your landlord didin't do that and the lending criteria has changed.
The owner owes money to a bank, he hasn't been making payments and the bank is goiing to sell the property to recover the money. If the property isn't worth what is owed, the bank will not get all the money back. They will come up short. That's a short sale. If you want to buy at the lower market price you make the offer to the owner and he then asks the bank to accept the lower amount.
If the owner can pay the missed payments and get enough for the property to pay off all that he owes obvioulsy everyone will be happier. But here's the rub. It costs about 10% of the sale price to sell and the owner might not have that much equity or other liquid assets to cover the costs. (transfer tax and brokerage fees).
At auction the bank usually bids the loan amount first and then others can come in. Many times the auction is unsuccsful and the property will then be listed and sold as an REO (real estate owned) basically bank owned property.
If you want to proceed get a Realtor to help you determine the value and negotiate with the owner and the bank. But remember to continue to pay your rent or you will be evicted with just cause.
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Mike Kelly A…, Agent, Santa Rosa, CA
Tue Jul 1, 2008
Chances are the amount owed is MORE than the current market value of the property. You may wish to get a Realtor involved in the process NOW. We have some great SF Realtors who contribute to this blog and who can help you out. What they will do first is arrive at a market value for the property. At that time they can determine if the property needs to be sold "Short" or for less than what is owed on the property. If this is the case then they can attempt to get the Landlord to negotiate a "short-sale" with the bank with you as the buyer.
You have not mentioned if you have ANY money or if you'll be even able to qualify for the new loan? Also, is there just a first in default or multiple loans on the property? If just one loan then perhaps you can work out a deal with the existing lender to allow them to write a new loan in place of the old. But this is all contingent upon you determing the market value of the property. I'd go from there. If the property/landlord is very sideways, meaning the value of the property is substantially under the loan amount then you've got your work cut out for you. Good luck!
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M, , San Francisco, CA
Tue Jul 1, 2008
So I need to talk to my landlord, not the bank?

Can you give me some more advice? What is a good offer? The amount he is in default is about $655K. I called his bank and they said they wouldn't consider a transfer/assumption without his loan being brought current.

You mentioned a short sale with the lender. What does that entail?

Thank you so much!
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Mike Kelly A…, Agent, Santa Rosa, CA
Tue Jul 1, 2008
That you're a tenant may be an issue as "Short-Sales" lean towards a "homeowner" in trouble rather than an "investor". However, you could follow Melanie's advice below and TRY for a short-sale but you'll need the total cooperation of your Landlord. Check out my web site for some ideas: good luck!!
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Melanie Nard…, , San Francisco, CA
Tue Jul 1, 2008
Your landlord is still the owner and would need to be open to negotiating a short sale with their lender. I'd approach your landlord letting them know that you are interested in making an offer if they are unable to bring their account current.
0 votes
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