Pittsburgh Tenants Face Eviction As Landlord In Foreclosure Flees Country; Rent-To-Own Agreement Turns Out To Be Bogus

In Pittsburgh, Pennsylvania, KDKA-TV Channel 2 reports:

• A real estate tycoon who promised to revitalize a number of local neighborhoods has taken off to Brazil while many of his tenants are about to be kicked out into the streets because his properties are in foreclosure. Bernardo Katz, a former Brazilian opera singer, built a multi-million dollar real estate empire in our area, but now he's returned to his home country leaving the banks and his tenants holding the bag.

***

• This week, 17 of Katz's properties went up for sheriff sale, including a home in Bethel Park where Eileen and Paul Karras thought they were building equity. Instead, Karras says their rent-to-own agreement with Katz turned out to be a fraud.

Reportedly, Katz is under investigation by the Federal Mortgage Fraud Task Force which includes the FBI, IRS and the U.S. Attorney's office. No charges have been filed to date.

For more, see Tycoon Flees To Brazil, Leaves Renters In Lurch.

For more on problems with "Rent To Own" and Lease / Option real estate deals, go here and go here. rent to own lease purchase option scams yellowstone equity skimming unwittingly digamma

More On Tenants Facing Foreclosure Evictions

Some links to recent stories on unwitting tenants getting evicted as a result of their landlords pocketing their rent while not making the mortgage payments, thereby allowing the properties to go into foreclosure:

• Atlanta, Georgia: WXIA-TV Channel 11 - Housing Crisis Hits Apartment Dwellers (story of a single mother with three kids who, along with 17 other families, will be evicted from an apartment building abandoned by the landlord; she unwittingly paid the landlord six months rent in advance),

• Palm Beach Gardens, Florida: The Palm Beach Post - Landlords fall into foreclosure, leaving tenants in shock, lurch (a single mother with two young kids who last month signed a lease for a townhouse; only two weeks after she had signed the lease, a man knocked on her door and delivered a mortgage default notice from the landlord's lender. The landlord hadn't made a mortgage payment in eight months.),

• Springdale, Arkansas: KHBS-TV Channels 40 / 29 - Springdale Apartment Renters Evicted After Owner Forclosed On (shocked tenants in complex of eight apartment units to get the boot),

• Venice, Florida: WWSB-TV Channel 7 - Venice couple evicted with no notice (couple who had been renting their house for more than two months, never missing a payment, are padlocked out of the home; everything they own is outside, covered with tarps. Along with their belongings, two cats and a dog are homeless now).

• Daytona Beach, Florida: Daytona Beach News Journal - Foreclosure frenzy hits renters (couple gets boot after only two weeks after moving in),

• Wichita, Kansas: The Wichita Eagle - Renters affected by housing crisis, too.

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

New Jersey AG Tags Downstate Firm With Suit Alleging "Rent To Own" Rent Skimming Scam

In South Jersey, The Philadelphia Inquirer reports on one of the three civil lawsuits recently filed and announced by the New Jersey Attorney General's office alleging various forms of mortgage and real estate fraud:

• The New Jersey Attorney General filed mortgage-fraud lawsuits yesterday in three counties against 36 defendants, including a South Jersey company accused of running a "rent-to-own" housing scam.

• In that lawsuit, filed in Camden County, the attorney general said Ultimate Real Estate Solutions in Williamstown set up a scheme to acquire 18 properties through fraudulent mortgage applications. Customers with bad credit were promised they could rent the properties - and eventually own them - while Ultimate paid the mortgages. Instead, the attorney general said, Ultimate collected the rent and allowed the properties to fall into foreclosure.

***

• A phone listing for Ultimate Real Estate was disconnected yesterday. The company and its president, Halimah Prater, were both named in the lawsuit. The Camden County complaint said Prater sought "investors" with good credit who could buy houses for people with bad credit. At least 16 properties were bought in the names of two men, Herbert Coleman and Yusef Hason, according to the complaint. Prater told Coleman, who had recently moved from a homeless shelter to a group home, that the properties would be in his name for only 30 to 90 days and that he would make "a few thousand dollars" on each sale, the complaint said.

For more, see N.J. firms named in rent-to-own housing scam.

To view the NJ AG's lawsuit and read how alleged scams like this work, see Milgram v. Ultimate Real Estate Solutions, L.L.C. et al..

For more on problems with "Rent To Own" and Lease / Option real estate deals, go here and go here.

Editorial Note:

While this case has been brought in the form of a civil lawsuit by the state Attorney General's office, conduct is alleged that the complaint specifically refers to as criminal in nature. As such, it wouldn't be a surprise if the New Jersey Feds (U.S. Attorney's Office, FBI, IRS, et al.) are watching this matter and loading up for a case of their own involving criminal charges (ie. mail & wire fraud, conspiracy, racketeering, money laundering, tax evasion, etc.) against these defendants. rent to own lease purchase option scams yellowstone equity skimming unwittingly digamma

Nevada Lawmaker To Push Making Rent Skimming A Felony In Attempt To Stop Rentals Of Homes In Foreclosure To Unwitting Tenants

In las Vegas, Nevada, KLAS-TV Channel 8 reports:

• There are thousands of homes in the Las Vegas valley in default and in numerous cases, those homes are being rented out to unsuspecting tenants. Now, the legislature wants to make it a crime for homeowners to rent out their homes if they are in the process of foreclosure.

***

• Senator Bob Beers, who wants to go after greedy homeowners, is so upset he said he wanted to "whack" the delinquent homeowners. "It's just wrong, I have no problem dealing with this as a felony," he said.

For more, see Lawmakers Target Delinquent Homeowners (read story) (watch video). equity skimming unwittingly digamma

When Your Landlord's Stiffing The Bank, You Could Be The One In Trouble

Here are a number of links to stories from around the country on the apparent widespread prcatice of renting homes in foreclosure to unwitting tenants, and serve as a strong reminder that tenants need to be proactive in their investigation of the status of the property they are leasing:

Washington, D.C. - WTOP Radio 103.5 FM: Renters beware: Know your foreclosure rights,

Bakesrfield, California - KERO-TV Channel 23: Renters Step Into Foreclosed Home Danger (Local Family Loses Home, Deposit After Rented Home Foreclosed),

Orange County, California - The Orange County Register: House, condo renters latest victims of foreclosure crisis (People renting homes, condos and townhouses find themselves out on the street after the owners fail to pay the mortgage).

South Central Michigan - The Ann Arbor News:

• When your landlord's in trouble, you could be too,
• Vulnerable renters need stronger rights (Mortgage meltdown affects them, too),
• What renters should know about foreclosure,

Southwest Florida - The News Press:

• Lousy landlord hurts families,
• Owner defaults; tenants evicted,

Northern/Central Florida - Hernando Today: Renters Suffering From Foreclosure Crisis.

Kingman, Arizona - Kingman Daily Miner: Mortgage crisis hits renters (Landlords with adjustable-rate loans see payments skyrocket).

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Unwitting Tenants Renting From Owner In Foreclosure Evicted While On Vacation; Lose $27K+ In Belongings Dumped On Front Lawn, Some Taken By Neighbors

In Clayton County, Georgia, The Atlanta Journal Constitution reports:

• A pair of Clayton County families were without a home and many of their belongings Friday, two days after the house they were renting was foreclosed while they were on vacation – their possessions removed, dumped on the front lawn and taken by neighbors. "It's a big mess," said Bridget Harris, one of the home's renters. "All I know is, I'm a tenant that was not negligent, and I paid my rent on time, and I have nothing."

• Harris said personal property worth more than $27,000, including three computers, a 52-inch television, a washing machine and dryer, clothes and personal information were taken. She said that she saw neighborhood children riding her sons' bicycles. "I had a lot of sentimental things, baby pictures, that were all over the yard; things I can't get back," she said.

For more, see Foreclosure mix-up puts tenants on curb (Families come home from vacation to find belongings strewn on lawn and stolen).

For other posts involving the problems tenants face in rented homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Foreclosure Evictions Resulting In "Tidal Wave Of Displaced Tenants" In Southern California

In Southern California, The Orange County Register reports:

• [W]hat began as a trickle last year is rapidly turning into a tidal wave of displaced tenants as Orange County foreclosures hit new records. [...] Brenda Magana, a housing specialist at the Fair Housing Council of Orange County, says the problem is snowballing. "Last year we were seeing three or four tenants (facing foreclosure) a month," she says. "Now we're seeing three or four a day."

***

• [California] Tenants do have some rights in these cases. A lender who foreclosed cannot require a tenant to move within 72 hours, say[s local real estate attorney Jon] Janecek. That three-day notice only applies to the former property owner. [California] Tenants must get at least 30 days to move.

• Don Readinger, a broker and manager of two South County real estate offices and who manages 100 rental properties, says the biggest problem is with out-of-state lenders who don't know the 30-day notice requirement under California law. "They try to intimidate the existing tenants," says Readinger, who is president of the Orange County Association of Realtors.

For more, see House/condo renters latest victims of foreclosure crisis (People renting homes, condos and townhouses find themselves out on the street after the owners fail to pay the mortgage).

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Elderly Connecticut Man Loses Rented Home Of 20 Years As Landlord's Mortgage Lender Forecloses

In Bridgeport, Connecticut, Hartford Business Journal reports:

• When a 70-year-old Bridgeport man returned to the third-floor apartment that had been his home for nearly two decades, the rental unit was locked and boarded up. His landlord had been foreclosed on. The blindsided renter was collateral damage.

• Attorney Richard Tenenbaum of Connecticut Legal Services declined to name his dispossessed client but said similar incidents are being played out nearly every day in Connecticut. “There are dozens, probably hundreds, of people being victimized because they don’t know what’s going on,” Tenenbaum said. “The number of evictions caused by foreclosures has probably doubled, at least, in the past few months.”

***

• After receiving a wave of phone calls from displaced families last summer, the NLIHC [National Low Income Housing Coalition] looked at foreclosure patterns throughout New England. In Massachusetts, 34 percent of foreclosures were on multi-unit properties. In Rhode Island, the rate was 41 percent. In more rural New Hampshire, multi-unit housing accounted for only 12 percent of foreclosures. “The majority of these foreclosures for multi-unit housing are for two-, three- and four-unit homes.” [NLIHC research director Danilo] Pelletiere said.

***

• But there are legal mechanisms that can protect [Connecticut] renters, including a six-month stay of execution on evictions if the tenant is not the cause of the notice, Tenenbaum said. But few tenants are aware that they have a legal right to contest being thrown out, he added.

For more, see Locked Out: Foreclosures Blindsiding Renters.

For the recent NLIHC study, see Properties, Units, and Tenure in the Foreclosure Crisis: An Initial Analysis of Properties at the End of the Foreclosure Process in New England.

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Boston City Council Considers Plan To Force Lenders To Rent Back Foreclosed Homes To Its Occupants

In Massachusetts, an editorial in the Boston Herald opines on a proposal being considered by the Boston city council:

• Boston city councilors are jabbing at a wasp’s nest of problems with a plan that would force lenders to rent foreclosed properties back to previous occupants. [...] The proposal, sponsored by six city councilors in a home-rule petition to the Legislature, would require that mortgage holders allow not just renters, but delinquent borrowers themselves, to stay in a home until it is sold to a third party - or until the measure expires in 2014.

For more, see Rental plan overreaches (when link expires, try here). equity skimming unwittingly digamma

Abandoned Atlanta Apartment Complex Left In Foreclosure; Tenants Face Water Shut Offs, Eviction

In Atlanta, Georgia, WSB-TV Channel 2 reports:

• Residents worry about rodents and scavengers at a local apartment complex that is covered in trash and overgrown weeds. The water will soon be shut off at a northwest Atlanta apartment complex now in foreclosure. But people still live there and say their home has now become a trash-filled mess and a haven for thieves.

• Mary Robinson watches as her once proud apartment complex falls apart around her in piles and piles of trash. The Maple Creek Apartments on Bolton Road are being slowly dismantled by scavengers. The scavengers are so bold Channel 2 caught them on tape driving away with stolen water heaters still full of water.

For more, see Atlanta Apartment Complex Covered In Trash. (read story) (watch video).

For other posts involving the problems tenants face in rented homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

More On Tenants Renting From Landlords Facing Foreclosure

Some recent stories on the issue of tenants renting from landlords who are pocketing their rent, beating the bank out of its mortgage payments, and allowing the home to go into foreclosure:

• Tampa, Florida: Blind newlyweds owed money by landlord,
• Miami/Liberty City, Florida: Boom & Bust, Part 3 (In Liberty City, renters suffer more than perhaps anyone else from the foreclosure crisis),
• Boynton Beach, Florida: Foreclosure Fallout For Renters,
• Las Vegas, Nevada: Renters, soldiers feeling foreclosure pain,
• Providence, Rhode Island: Foreclosures leave some tenants high and dry (Landlords in foreclosure also failing to pay utility bills, resulting in tenants dealing with water shutoffs before ultimately facing eviction),
• Cleveland, Ohio: Area renters hit hard by foreclosure crisis (Little notice given to people, study says),
• Southern California (Inland counties): Foreclosures leave tenants out in cold, too,
• St. Louis, Missouri: Renters getting swept up in foreclosure mess.

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Housing Inspector Hits Landlord In Foreclosure With $6K Fine For Failure To Provide Water, Remove Garbage

In Haverstraw, New York, The Journal News reports:

• A village woman and her children have been living in a rental house under foreclosure that hasn't had water since May, health inspectors said [Wednesday]. Officials from the Rockland Department of Health have been trying to contact the owner of 55 New Main St. for months.

***

• Public health law prohibits anyone living in a home without drinkable water. [...] No one has been able to locate [owner Charles] Polanco, who also has an address in the Bronx. [Wednesday], the [Board of Health] assessed a $6,000 fine against him for failing to provide water to the home and for failing to clean garbage from the property. A bank is in the process of foreclosing on the home, but it is still owned by Polanco.

For more, see Haverstraw family rents home with no water since May.

For other posts involving the problems tenants face in rented homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Nevada Lawmakers Address Assertions Of Illegal Court Orders Affecting Tenants In Foreclosure Evictions

In Las Vegas, Nevada, the Las Vegas Review Journal reports:

• Some justice courts may be evicting tenants in foreclosed rental houses without providing the required three-day notice, a lawyer told a legislative subcommittee Monday. The Legislative Commission subcommittee on mortgage lending and housing heard the testimony Monday in a session at the Sawyer building in Las Vegas. Steve Kilgore, deputy director of the Henderson constable's office, told the panel that justice courts issue orders for him to evict renters immediately from houses that have been foreclosed.

For more, see Courts said to act too hastily (Officials may not be following the law in evicting tenants). equity skimming unwittingly digamma

Landlords In Foreclosure, Their Tenants, Water Shut Offs, No Trash Pickups

The following links are to stories on the problems of water shut offs and curtailed garbage pick-ups that are often faced by tenants with landlords in foreclosure who stop paying the utility bills:

• Jacksonville, Florida: Apartments In Foreclosure; Tenants Suffer,
• Hollywood, Florida: Hollywood's Gracewood Apts. Sees Trash Removed (The Owner Of The Foreclosed Property Had Earlier Failed To Pay Utility Bills);
• Haverstraw, New York: Haverstraw family rents home with no water since May;
• San Francisco, Cailfornia: East Bay: District continues costly water policy;
• Oakland, California: Renters tell of harassment in foreclosure proceedings (The lender stopped paying the water bill in a bid to evict them, Oakland duplex residents say. Activists say such tactics are on the increase);
• Providence, Rhode Island: Foreclosures leave some tenants high and dry (Landlords in foreclosure also failing to pay utility bills, resulting in tenants dealing with water shutoffs before ultimately facing eviction);
• Adams, Massachusetts: Renting Homes In Foreclosure, Utility Shut Offs, Trash Accumulatons, Code Violations Among The Accusations Against One Landlord;
• Atlanta, Georgia: Atlanta Apartment Complex Covered In Trash (read story) (watch video).

For other posts involving the problems tenants face in rented homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Self Help Guide Available For Massachusetts Tenants Renting From A Landlord In Foreclosure

For Massachusetts tenants who find themselves renting from a landlord facing foreclosure, MassLegalHelp.org provides some self-help legal information that may be helpful. For more, see:

• Tenants Facing Foreclosure,
• Getting Your Security Deposit Back,
• “Cash-for-Keys” Schemes. equity skimming unwittingly digamma

D.C.: The Place to Be for Tenants of Foreclosed Buildings

In Washington, D.C., a story Washington City Paper's housing blog serves as a reminder that, in the District, tenants in foreclosed homes have strong protections:

• The District has some of the strongest foreclosure-protection laws in the country, according to Joel Cohn, Legislative Director for the [D.C.] Office of the Tenant Advocate. Under D.C. law, there are specific reasons why a tenant can be evicted.

• "Those are the exclusive reasons in the District," says Cohn "and foreclosure isn't one of them." They [can] maintain their tenancy on exactly the same terms as before … Tenants have the right to stay as long as they pay rent. They also can demand that the landlord fix any housing code violations.

• From May to July of this year, tenants from ten different foreclosed D.C. properties contacted Cohn's office asking about their rights. It's a smart call to make: Banks commonly tell unsuspecting tenants that they have to move out, in violation of D.C. statute, says Cohn. Some tenants seeking legal aid have already left their buildings, and in that case, it's usually too late do anything.

• "The name of the game is getting notice to the bank, which might be ignorant in good faith, though it's up to the bank's attorneys to know the local housing laws," says Cohn. "So, I don't think there is such a thing as good faith failure to know the law."

For more, see D.C.: The Place to Be for Tenants of Foreclosed Buildings.

If you are a tenant in a foreclosed home located in the District of Columbia, see Office of the Tenant Advocate: DC Law Protects Tenants During Foreclosures for information on how to deal with the threat of eviction. equity skimming unwittingly digamma

Tenant Foreclosure Evictions Make No Distinctions In Economic Status

CNN reports on the individual stories of Southern California two tenants, each on different ends of the economic spectrum, who both face eviction on homes they are renting. In each case, their respective landlords have been pocketing their rent while stiffing their mortgage lenders out of their mortgage payments, thereby allowing the homes to go into foreclosure.

1. Charles Nelson has paid about $30,000 in rent since moving into a spacious four-bedroom home in August. He was stunned when a real estate agent knocked on his door recently and said the home was in foreclosure. His landlord had not paid the mortgage since he moved in and the bank is now demanding the house back. Nelson will also lose his $7,700 security deposit. [...] Nelson, the owner of PCH Auto Sales, lives in the upper-middle class enclave of Laguna Hills, south of Los Angeles, with his girlfriend and two sons from previous marriages.
.

2. More than 100 miles away in the working-class city of Palmdale, Fai Nomaaea -- a 35-year-old mother of eight -- can relate. The single mom was cleaning the yard when a man handed her a notice of foreclosure. Like Nelson, she had been paying her rent on time every month. She now lives in fear every day. "I don't know what's going to happen the next day," she said. "I don't know if they're going to come to the door and tell us that we have to move, and I don't have anywhere to go." For Nomaaea, getting booted from the home presents another hardship: She lives on a fixed income and can afford about $1,200 a month in rent. It also means finding a new school for her children.

For more, see Man pays $30K in rent, faces eviction.

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

WaMu Temporarily Blocked From Booting Tenants In 17 Duplexes As Foreclosed Landlord Files 11th Hour Bankruptcy

In Grand Rapids, Michigan, The Grand Rapids Press reports:

• Call it a stay of eviction. Tenants expecting to be evicted from some foreclosed Northeast Side apartments as soon as today received a 30-day reprieve, according to the bank holding the mortgage. Washington Mutual Bank dropped its court plans Tuesday to claim properties once owned by Tom and Melody Jacobs and force eviction of tenants from apartments in the 900 block of Maybelle Street NE.

***

• "The borrower filed Chapter 7 bankruptcy, which stays all proceedings. For the tenants, it means they are not in danger of being evicted. At the minimum, there is a 30-day wait before anything can happen," said bank attorney Marshal Isaacs from his Troy office. Lawyers say the monthlong window is expected to extend to tenants in other of the Jacobses' foreclosed properties who recently were slapped with last-minute eviction notices at 903-911 Diamond Ave. NE and the Northfield Apartments at 1239-1245 Northfield St. NE.

For more, see Evictions on hold at foreclosed apartment units.

For an earlier post on this story, see Tenants In 17-Unit Complex Face Foreclosure Eviction; Offered $1,000 To Leave Or Face The Boot. equity skimming unwittingly digamma

L.A. City Attorney Steps In To Stop Attempted Illegal Foreclosure Evictions

In Los Angeles, California, KABC-TV Channel 7 reports:

• [W]hat was once an eviction letter is now in shreds. City officials said the tenants at one South L.A. duplex and four other homes were illegally targeted for eviction by Countrywide after their landlords lost the buildings in foreclosures. "The brokerage house that represents Countrywide and sent that letter has agreed to rescind the letter today on this property by 2 o'clock," said L.A. City Attorney Rocky Delgadillo.

• The problem is the building is rent-stabilized, which means the tenants, under city law, would be entitled to $6,800, all the way up to $17,000, if they were to be evicted. But the city says Countrywide is trying to skirt those payments.

• The letter sent to the renters offered just $1,000 if they cleaned up their apartments and left by August 1, 2008. "This letter was in violation of city laws which forbid eviction just because a property changes ownership due to foreclosure," said L.A. City Councilman Eric Garcetti. [...] Countrywide issued a statement [...] saying the eviction letters were the result of a mix-up by a real estate agent working with the Calabasas-based mortgage lender [...].

***

• The City Attorney's office [...] has opened an investigation into Countrywide's dealings with renters and wants to hear from others who may have faced the same kind of illegal eviction that [one tenant feature in the story] narrowly escaped.

For more, see Eviction notices wrongly sent to renters. countrywide consumer problems equity skimming unwittingly digamma

Tenants In 17-Unit Complex Face Foreclosure Eviction; Offered $1,000 To Leave Or Face The Boot

In Grand Rapids, Michigan, The Grand Rapids Press reports:

• A group of Northeast Side renters were shocked this week when they were given eight days to move out of their homes after a mortgage company foreclosed on their building. Housing advocates say the case, a growing problem, demonstrates what little protection renters have in another side to the national mortgage crisis. Renters in 17 duplex-style apartments [...] received notice Monday to vacate their homes by July 16, the tenants said.

***

• Residents on Monday were offered $1,000 reimbursement if they signed before Wednesday a paper agreeing to move by July 16. But some residents said money after the fact would not help those who had no money or ability to move in eight days.

***

• Some of the residents are young mothers with children and no transportation, others are working single women, some are families and all could be homeless, advocates say, through no fault of their own. "The clients I work with are living paycheck to paycheck. It really puts the tenants in a tough position and makes the working poor struggle that much harder," said Legal Aid of Western Michigan attorney Cavan Berry. The organization is investigating.

For more, see Foreclosure leaves tenants on the street.

For story update, see Evictions on hold at foreclosed apartment units (7-16-08).

For other posts involving the problems tenants face in rented homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma