Wednesday, December 16, 2020

Big Money Wall Street Operators Now Entering Sale Leaseback Rackets Targeting Financially Distressed Homeowners

 In New York City, The Real Deal (New York) reports:

  • Sale-leaseback deals are becoming an increasingly popular investment option as homeowners struggle to pay their mortgages, with many facing the prospect of having to sell. Some companies are investing in that corner of the single-family home rental business, tapping into a property’s value while keeping a steady rent flow by not forcing out the seller, according to Business Insider.

    One such company, EasyKnock, is going all in.

    The firm is now armed with a $500 million credit line that it will use to buy homes then rent them back to sellers, EasyKnock CEO Jarred Kessler told Business Insider. That boosts the company’s buying power significantly. Its portfolio now includes $200 million worth of homes.

    Richard Hill, an analyst at Morgan Stanley, said that some large single-family rental companies could also use sale-leaseback deals as a way to market to older homeowners who need to tap into their equity for retirement or healthcare spending.

    Invitation Homes, the largest single-family home landlord, previously said that it will seek to add sale-leaseback deals to its pipeline of acquisitions.
Source: Sale-leasebacks increasingly target struggling homeowners (Companies like EasyKnock and Invitation Homes look to tap that investment option).

Wednesday, September 06, 2017

Tenants Screw Landlords: Renters Use Airbnb To Run Illegal Flop Houses, Subletting Homes To Travelers, Sticking Unwitting Property Owners With Huge Tab For City Fines, Legal Bills

In Miami Beach, Florida, CNBC reports:
  • Drew Grewal faced fines of nearly half a million dollars because his Miami Beach home was being listed illegally on Airbnb.

    In Miami Beach — as in New York, San Diego and many other U.S. cities — short-term rentals of the kind facilitated by Airbnb, VRBO, Tripadvisor and others are strictly limited. Laws, fees and taxes vary regionally, but fines for violations are typically high. In Miami Beach, the fines run at $20,000 for a first violation and rise from there.

    When the first notice arrived on Jan. 19, Grewal thought the city of Miami Beach must be mistaken. He hadn't used Airbnb as a host in years. Then it dawned on him that his long-term tenants might be responsible, despite a clause in their lease barring them from using his place for transient occupancy.

    An agent checked up on the property for him and confirmed his suspicions. The yard had been trashed, with some patio furniture shredded. Somebody had installed electronic locks — presumably so guests could check in and out.
    After he evicted his tenants, Grewal says, he noticed some of his furniture missing, including a distinct purple futon and a white couch. He says he saw both items later appear in two other Miami Beach listings on Airbnb.

    "This was just one more kick in the face. Like here – throw some furniture out with all the other money I was spending to fix this," Grewal said.

    The listing that had been pulled down from Airbnb appeared with the same photos and copy on a site called It turns out that Grewal's tenants, Isabel Berney and Temitope "Truth" Oladapo, were behind that site — Oladapo registered the domain, and Berney lists herself as the company's co-founder on her LinkedIn page.
    Grewal's misery has plenty of company. Other homeowners and real estate professionals are facing similar troubles in Miami Beach and beyond.

    A long-time real estate investor in Miami Beach, Rula Giosmas, told CNBC she had Airbnb-related problems at two of her four properties there. In the most extreme case, she thought she had rented out her place to a nice couple with a kid moving from New York.

    Her tenants in this house? Oladapo and Berney, according to correspondence viewed by CNBC.

    (Giosmas did not know the other landlord quoted in this story, Grewal, at the time, but the two have been in touch after Grewal saw his missing purple futon in photos on a listing for her home on Airbnb.)

    Within a couple of months, the plumbing at her property had been clogged. Giosmas sent a plumber out, who suggested she may want to drop by for an inspection.

    When she did, she says she found the place had been outfitted with smart locks and security cameras, presumably so the tenants could remotely let guests and a maid service in and out of the property — or keep inspectors and landlords locked out.

    The place was also crammed with cheap furniture, double beds in every room, and had signs taped up throughout the house admonishing guests not to throw parties or make loud noises, she says.

    Knowing that short-term rentals were not allowed in this zone of the city, she checked Miami Beach records for any notices on the property. She found that the city was fining her $20,000 for short-term rental violations there.

    Giosmas says she lost more than four months' rent to the tenants who were running what she said was "like a flop house" out of her property. And she lost the faith of her neighbors who complained about raucous guests who left trash strewn around the neighborhood. "They had dozens of bags of trash on the side of the house that hadn't been picked up."

    When Giosmas reached out to Airbnb with the listing, the company told her she needed to talk to the hosts (her tenants) to resolve the issue, she says. But within five days, she estimates, the company took the listing down.

    Still, she's not pleased. "It's a huge scam," she told CNBC of her experiences with renters illegally subletting their places to travelers. "And the city sticks the owners with the fees. Airbnb, VRBO and the rest of them are like real estate cancer."

    She is still working on getting tens of thousands of dollars in fines resolved with Miami Beach. And as with Grewal, payments to lawyers have also cost her thousands.

    In a statement provided to CNBC, Airbnb placed the blame on the city.

    "The Miami Beach fines are outrageously punitive and simply bad policy. They've initiated significant confusion among the residents and, worst of all, turned neighbors against neighbors. We advocate strongly on behalf of our hosts for fair home sharing regulations in order to ensure that the laws are simple and understandable for everyone."

    The problem isn't limited to Miami Beach, however.

    In San Diego, two real estate professionals who asked to remain unnamed said homeowners' associations have been plagued by long-term tenants turning houses into "youth hostels" in the area, typically using Airbnb to book guests.

    One, in the San Diego suburb of Coronado, told CNBC, "It's a no-margin bed-and-breakfast for them. Homeowners are getting fined by their HOA, and sometimes the city, having to hire property managers and lawyers to deal with it all. They're losing their livelihoods. They rely on rent to pay mortgages. And they didn't count on all these expenses."

    Airbnb did not comment on the alleged incidents in San Diego.
    Meanwhile, both Grewal and Giosmas tell CNBC the experience led them to sell their houses before they wanted to.

    Following months of lost rent, Grewal sold his Miami Beach property and says he accepted a price 10 to 15 percent lower than he would have sought under different circumstances.

    Giosmas said she sold off two properties in Miami Beach already and is listing her other two. She lamented, "After 26 years here, I'm trying to get off the beach. I felt like my house was prostituted."
For the story, see These homeowners faced an Airbnb nightmare as renters left them facing huge fines and angry neighbors (Homeowners in Miami Beach tell CNBC that they've faced huge fines from the city when tenants in their properties listed them illegally on Airbnb; Airbnb told property owners it was not responsible for vetting whether properties are allowed to be listed for short-term rentals; Airbnb was slow to take the listings down, and has not instituted the most obvious long-term fix: banning property listings in ZIP codes where cities don't allow them).

Landlord Screws Tenant: Promised "Money Off Rent" To Lease Fixer-Upper, Couple Begins Repairing Home, Then Finds Out Premises Was Earlier Condemned By Code Enforcement & Now Faces Wrecking Ball

In Bucyrus, Ohio, the Telegraph-Forum reports:
  • Weeks of unpaid work behind them, a Bucyrus couple learned Wednesday [August 30] that they will never get to live in the house they labored to repair.

    The Bucyrus Board of Building Standards and Appeals met to discuss the home at 342 Wiley Street, a home they initially condemned in June. During Wednesday's appeal of that order, members of the board voted unanimously to uphold the condemnation, and ordered the home be torn down.

    The house, owned by Ken Long, caught the city's attention in March when someone notified the city of its deteriorated condition. After an inspection by Gordon Grove, the city's property maintenance officer, the city issued a property maintenance violation.

    "There were multiple issues with the property, including trash, rubbish, weed issues and structural issues," Grove said.

    The city then gained access to the home, and once inside, Grove realized the foundation of the house was unsafe. It didn't take long for the city to condemn the structure. Long, though, appealed, and earned 90 days to prove he could make the house safe.

    Shortly after, Jackson and Abbey Workman found an advertisement for reduced rent, as long as the tenants agreed to make a few repairs to the home, according to Bucyrus Law Director Rob Ratliff.

    "Their house was being foreclosed on, and they had 30 days to move," Ratliff said.

    Desperate, the couple wanted to make a deal with Long.

    "At first, we couldn't come up with the money," Abbey Workman said Wednesday during the appeal hearing. "(Long) said if we came up with the money, and it was still available, to give him a call."

    Long called the couple a few days later, and said he would accept $600 from them as a deposit for the already-condemned home.

    "Why did you give him the money?" Ratliff asked her.

    "To get the key," she responded.

    Workman told the appeals board that Long told them he would take care of the major, structural repairs to the home, "the hard stuff," as long as the couple handled cosmetic repairs: "I call it the pretty stuff, like the paint."

    "Did he explain to you that the house had previously been condemned?" Ratliff asked.

    "No," she answered.

    The couple, who admitted to city employees that they had no prior construction experience, were promised "money off the rent" for their help in the project. But with their foreclosure still looming, and repairs to their new home far from complete, Abbey said she and her husband realized the project was doomed.

    Things got worse when city employees noticed what Long was doing to the house. Ratliff made contact with the Workmans, and the city scheduled Wednesday's hearing.

    "We've asked him for our money back," Abbey Workman said. "He tells us, 'no,' he cant do that — he still thinks he can get the house done and put us in it, but we don't see that happening."

    Members of the appeals board weren't pleased with what they heard.

    "This is a waste or our time," Councilman Mark Makeever said. "This man has violated an agreement with our city — he's making these people do this work that a contractor should have to do."

    Makeever called for a vote to order Long tear down the house, "no exceptions." The board voted unanimously in favor of the order.

    "Now he has 30 days to demolish the property," Ratliff said. "If he fails to do so, he could be charged with criminal violations for failing to demolish the property."

    As for the Workmans, Ratliff said their best chance to recover their money is take Long to small claims court.

Tuesday, September 05, 2017

Landlord Agrees To Pay $120K+ In Inspection & Abatement Costs, Penalties To Settle Environment Feds' Allegations Of Failing To Provide Prospective Tenants With Lead Paint Disclosure Information When Renting Apartments

In New Haven, Connecticut, the New Haven Register reports:
  • A landlord in the city with one of the largest holdings has agreed to perform lead inspection and abatement work at three of his properties in a consent agreement with the federal Environmental Protection Agency.

    Sam Hecht, president of Pike International, also agreed to pay a fine for allegedly not providing general information to his tenants about the dangers of lead paint or whether their specific apartments contained lead-based paint.

    The EPA said it found “numerous instances” of non-compliance with notification rules and with the correct practice for removing lead-based paint.

    Pike International, owns and/or manages more than 800 apartments in the city. It neither admits nor denies “the factual and legal allegations” brought by the EPA, according to the agreement.

    Hecht will pay a penalty of $12,139 and by Oct. 31, 2018, it will spend at least $109,246 on lead inspection and abatement where needed at the three complexes.

    Those apartments are: Quinnipiac Gardens at 13-14 Quinnpiac Ave.; units at 522 Fountain St., and apartments at 226 Ellsworth Ave.

    “As a result of this settlement, Pike and its related entities will comply with federal lead paint laws. This action will help to ensure that tenants in the New Haven area, including children, will be better protected from the risks of lead-based paint,” the EPA said in a statement.

    Pike International, in its statement, said it “admitted to no guilt on any of the allegations.”

    It said “as a service to the New Haven community, it agreed to continue to lower the lead levels in some of its community buildings. In all instances these services are not mandated by federal or state law.”

    A total of 10 apartment complexes are listed in the consent agreement with the EPA, which Hecht signed in May. The original complaint by the EPA was brought in March 2016 with answers provided by Pike in August 2016.

    The consent agreement also involves the following properties: 173-175 Park St.; 1533 Chapel St.; 287 Norton St.; 325 Fountain St.; 477 Prospect St. and 80 Sherman Ave.

    The EPA said the agreement resolves alleged notification violations and renovation rules that stipulate use of trained certified personnel to supervise and remove lead-based paint.

    The consent decree states that Pike agreed that settling the matter “without further litigation is the most appropriate means of resolving this matter.”

    Pike said the “findings of the EPA were in a handful of leases among thousands of signed leases over the 17 years of the company’s existence, which indicates close to a 99 percent compliance record. Pike continues to work with all federal, state and city agencies to make New Haven safer for all its residents.”

    The environmental agency mandates that tenants be given general information about the dangers of lead, particularly to children, and specific information about an apartment before a lease is signed.

    It said this is important because tenants will then learn how to protect themselves and make an informed decision as whether or not to rent a particular unit.

    Lead-based paint was in wide use in pre-1978 housing and the removal rules are designed to protect tenants when an older home is remodeled.

    David Deegan, spokesman for the Boston office, said the danger comes from peeling or chipping paint and the dust left behind if it is removed incorrectly. He said it is the kind of thing that small children can easily ingest.

    “Lead poisoning of infants and children can cause lowered intelligence, reading and learning disability, impaired hearing, reduced attention span, hyperactivity and behavior problems. Adults with high lead levels can suffer difficulties during pregnancy, high blood pressure, nerve disorders, memory problems and muscle and joint pain,” according to the EPA.

    Pike has also been ordered to put a record-keeping system in place to make sure tenants are told of the potential hazard and the renovation rules are followed.

    Deegan said property owners are not mandated to test for lead.

Lawsuit: Potentially Thousands Of Former Tenants Were Allowed To Live In 1,100-Home Military Housing Complex Without Warning Of Serious Environmental Contamination

In Laurel Bay, South Carolina, The Beaufort Gazette reports:
  • Potentially thousands of former Laurel Bay residents were not warned of serious environmental contamination while living at the U.S. Marines’ housing complex in northern Beaufort County and are owed back rent and other damages, a lawsuit filed Thursday alleges.

    Eleven former residents filed the suit in Beaufort County Circuit Court on behalf of themselves and “all other similarly situated,” described in the suit as “thousands of former tenants who lived at Laurel Bay.” The complex includes about 1,100 homes.

    The suit alleges the defendants — private companies that manage Laurel Bay — were aware of multiple serious contamination problems at the housing site but that they failed to adequately inform the residents.

    One cause of contamination: Underground storage tanks — once used to heat homes from the late 1950s to the late 1960s or early 1970s — were abandoned and then “re-discovered during utility construction activities” in the late 1990s, according to the suit. The tanks were in “severe disrepair and leaking remnant fuel oil in close proximity to Laurel Bay homes,” the suit said.

    Authorities have estimated that about 1,400 tanks were buried underground, though the exact number is unknown. In 2007, authorities began to remove the tanks. The Marine Corps claimed “all known” tanks had been removed as of September 2015.

    Another cause of contamination was the extensive peeling of lead paint, the suit alleges. Notably, lead paint, which studies have linked to various health problems in children, was found in nine playgrounds at the housing complex, besides the outside of homes where paint had peeled off, the suit said.

    In addition, although the pesticide chlordane was banned by the U.S. Environmental Protection Agency in 1988, Laurel Bay management continued to use the chemical up to 1995, according to the suit. Laurel Bay homes were also especially susceptible to mold growth, the suit stated.

    The plaintiffs allege that Laurel Bay management failed to disclose information about the health risks to the housing community, and therefore management didn’t honor its end of the lease. The suit said because of that, former Laurel Bay residents “sustained damages … including the overpayment of rent.” The suit seeks class-action status and requests unspecified “(g)eneral, special and consequential damages,” as well as punitive damages.

    The suit also alleges the defendants violated the South Carolina Residential Landlord Tenant Act and the Lead-Based Paint Hazard Reduction Act of 1992.

    Rob Metro, a Hilton Head-based attorney who is representing the plaintiffs, has been working since January with families who live or have lived in Laurel Bay. Metro was not immediately available for comment Friday.

    In 2003, Tri-Command Managing Member LLC took authority over the Laurel Bay military housing complex in a 50-year lease agreement with the U.S. Navy, according to the suit. Tri-Command, now known as Atlantic Marine Corps Communities LLC, is one of the defendants in the suit. Another defendant is AMCC Property Management LLC, which served as the leasing agent for Laurel Bay families.

    Representatives from the Atlantic Marine Corps Communities and AMCC Property Management were not available for comment Friday.

    Questions about the Laurel Bay housing community captured national attention in January after Amanda Whatley, one of the plaintiffs, posted a YouTube video about her daughter’s leukemia. Whatley suspected her daughter’s cancer was connected to contamination at Laurel Bay, although doctors and scientists have advised caution in drawing a direct causal relationship between contamination and cancer.

    As of Sept. 1, the YouTube video has been viewed over 51,000 times.

    Marine Corps officials at Laurel Bay promised the results of a health study last spring, but the release date has been pushed back to the fall. Information about the study can be found at

Monday, September 04, 2017

About 3/4 Of All Homes In Southern Illinois City To Be Targeted For EPA Soil Cleanup; Long-Defunct Zinc-Smelting Factory At Center Of Environmental Concern

In LaSalle, Illinois, the News Tribune reports:
  • About 2,778 homes will need soil excavated over nearly 15 years at a federal cost of almost $113 million, according to a report on the Matthiessen and Hegeler zinc factory Superfund site in La Salle.

    The U.S. Environmental Protection Agency’s 399-page report outlines selected plans to clean up contamination in and around the 227-acre Superfund site.

    Since at least 2015, when the EPA scheduled public meetings about the cleanup, nearby residents have been concerned about threats to their health, future use of their yards and effects on property values.

    To remove high levels or arsenic, lead and cadmium in residential yards, the EPA plans to excavate 200,000 cubic yards of soil.

    This would fill about 18,000 dump trucks. The removed soil would be replaced with clean soil and yards would be left looking as they were.

    The former zinc smelting grounds east of Sterling and Zinc streets, and the next-door grounds at Carus Chemical Co., including land sloping eastward to the Little Vermilion River, also are targeted for cleanup.

    Not even a heads-up?

    La Salle officials said they had not been notified of the latest EPA report, which was issued in April.

    “I’m not aware of the decision,” said La Salle’s attorney, Jim McPhedran. “To my knowledge, the city was not forwarded a copy.”

    La Salle Mayor Jeff Grove, when he heard the estimated number of homes requiring cleanup, said, “Wow, that many?”

    Grove said investigation and cleanup is the right direction.

    “Whatever we need to do or can do with the EPA, we’re willing to work with them and the Carus family to rectify this. I think it’s a positive that we’re moving in this direction and getting a solution.”

    Regulatory agencies have investigated the site for at least 26 years. The latest EPA report does not outline dates and sequences of cleanup but said this will be determined in the next step, the cleanup design phase.

    The EPA is considering using phases for residential cleanup, giving higher priority to properties with the highest concentrations of contaminants and posing the greatest health threat.

    How many yards will be tested?

    The EPA’s current estimate of 2,778 properties comprises about three-fourths of all residences in La Salle, based on the number of homes in the latest city water billing cycle, according to the city of La Salle.

    The number of properties that will be cleaned up, and the depth of soil excavation, will be determined in the design phase.

    “Since only a small percentage of the residential properties were tested during the remedial investigation, many additional properties remain to be tested,” the EPA report said.

    A few Peru residents might get caught up in this. Earlier investigations tested about 200, or 4 percent, of properties over an area that contained about 5,000 residences to the north, south and west of the factory site, stretching roughly to Pulaski Street on the east side of Peru.

    The report lists 185 residential addresses that were previously tested, and provides risk and hazard assessments based on test results. To reach the estimate of 2,778, the EPA divided neighborhoods into four zones, based on earlier test results and distances from the former factory site, and extrapolated results to the entire zone.

    The cost estimate of $112,925,000 was based on excavating a maximum depth of 24 inches.

    “However, the required excavation depth at any given property may be less, based on that property’s sample results,” the report said.

    Leave yards as found

    After removing contaminated soils and adding cleaning soil, the EPA plans to lay sod, and water and mow yards for 30 days.

    “At each residential property, excavated areas will be backfilled with clean soil, including 6 inches of topsoil, to maintain the original grade,” according to the report. “Each yard will be restored as closely as practicable to its pre-remedial action condition. The cost estimate assumed that excavated yards at residential properties would be sodded and that non-residential properties such as schools, parks, commercial/industrial properties, etc., would be seeded. Once the properties are sodded or seeded, maintenance of the sod/seed, including watering, fertilizing, and cutting, will be conducted for 30 days. After the initial 30-day period, property owners will be responsible for the maintenance of their yards.”

    How bad are the contaminants?

    The contaminants include metals and metalloids such as arsenic, zinc, antimony, cadmium, manganese and lead. In some cases, these are at concentrations that could cause cancer in people exposed continuously over many years and decades, according to the EPA.

    The zinc factory area contains the highest levels. Arsenic measured 810 and 528 parts per million. A pile zinc plant waste dumped near the Little Vermilion River has arsenic as high as 251 and 117 parts per million. In residential areas, the highest arsenic concentration was 51.2. The goal is to reduce arsenic to 18 or less in residential areas, according to the report.

    The former zinc factory area had lead concentration as high as 209,000 and 62,600 parts per million. Other high measurements of lead include 38,700 in the slag pile, 3,660 on the Carus plant grounds and 3,220 in the residential area. The EPA plans to reduce lead to 400 parts per million or less in neighborhoods, but this goal is being reevaluated and could change, according to the report.

    The highest level of cadmium measured in residential areas was 120 parts per million. The goal is to reduce this to 6.4. On the main zinc smelting grounds, cadmium measured 1,020.

    Contaminants of concern on the Carus grounds include arsenic, manganese, lead and benzo(a)pyrene.

    Scrubbing the industrial footprint

    The EPA plans to excavate contaminated soils and consolidate them on the former zinc smelting grounds, although the cleanup design phase will determine if soil needs to be disposed off-site. Excavated soil in this project is considered hazardous waste.

    The 180-acre Matthiessen and Hegeler Zinc Co. site was home to zinc smelting and milling from 1858 to 1978, as well as sulfuric acid production, ammonium sulfate fertilizer manufacturing and coal mining. Some earlier emergency cleanups were done. Runoff washes into the Little Vermilion River and river samples indicate elevated levels of metals.

    Responsible parties for the zinc factory area include La Salle Acres Inc., which owns about 110 acres, and Fred and Cynthia Carus, who own 17 acres, according to the EPA.

    Zinc smelting waste, known as sinter and slag, were dumped on land later purchased by Carus Chemical Co. The largest pile is 80 to 90 feet tall and covers 18 acres.

    To the immediate south of the zinc site, Carus Chemical Co. was founded in 1915 by Edward Hegeler Carus, grandson of M&H zinc magnate, Edward Hegeler. A primary product of the company to this day is potassium permanganate. Over time, Carus added production of phosphate corrosion inhibitors, manganese dioxide, sodium permanganate, 2,3-pyridine dicarboxylic acid, manganese-based catalysts, hydroquinone, manganese sulfate and cesium compounds.

    Under a 2006 order, Carus Chemical Co agreed to study and clean up its property. Kegan Pakula, Carus Chemical Co. spokeswoman, issued a statement this week regarding the latest EPA report.

    “Carus remains committed to working with the EPA throughout this process. The selected remedy is very similar to the proposed remedies already discussed in public forums and in our ongoing communication with the EPA, so there were no surprises when the record of decision was released earlier this year.”


    The EPA believes groundwater does not warrant cleanup now or in the future, according to the report.

    The zinc smelting did not impact deep bedrock, and shallow groundwater at the site does not connect with the deeper aquifer, and the city obtains its drinking water from four wells about three-fourth of a mile south of the site.

    The state classifies groundwater beneath the Superfund site as general resource, not to be used for drinking, and there are no groundwater wells there. Further, a city of La Salle ordinance approved in 2002, in conjunction with the Illinois EPA, prohibits drilling of water wells there, according to the report.
Source: 2,775 homes, $113 million: EPA selects remedy for Superfund cleanup in La Salle. lead contamination epa environmental protection agency

Despite Threats Of Major Federal Budget Cuts, EPA Cleanup Continues For Arsenic & Lead-Contaminated Soil For Approx. 4,000 Evansville Neighborhood Homes; Finger Of Blame For Tainted Properties Points To Manufacturing Operations That Took Place Locally Over 100 Years Ago

In Evansville, Indiana, WKU-Radio 97.5 FM reports:
  • The Environmental Protection Agency is about halfway through the cleanup of an Evansville site contaminated with lead and arsenic.

    The contaminated site is 4.5 square miles in the Jacobsville neighborhood of Evansville. The lead and arsenic in the soil were left over from manufacturing operations that took place more than one hundred years ago.

    The site is on the EPA’s Superfund National Priorities List and the cleanup has been in progress for five years.

    Jena Sleboda-Braun is the remedial project manager in the EPA’s Superfund Division for the Chicago region. She says residents are not being displaced during the cleanup.

    We just work on their lawns where the contamination has settled into the soil. We dig out the dirt that has the contamination and then we backfill it with clean dirt and restore the property with sod and any landscaping that was there before.”

    The EPA project started five years ago and has received more than $6 million for cleanup and restoration.

    President Trump has proposed major budget cuts to the EPA, but Sleboda-Braun says the project remains on track.

    “I’m not aware of any issues at this time. Every year we’ve gotten funding and I don’t have any information that that would not continue.”

    The cleanup is expected to continue through 2020 and remove contamination from the soil at about 4,000 homes.
Source: EPA Halfway Through Cleanup of Contaminated Soil at 4,000 Homes in Evansville. lead contamination epa environmental protection agency

State Regulators Say Soil At Over 10,000 Homes In Southern California May Have Been Affected By Lead Emissions Drifting From Now-Shuttered Battery-Recycling Plant; Company Denies Fault, Points Finger Elsewhere

In Los Angeles, California, the Los Angeles Times reports:
  • By this fall, California’s Department of Toxic Substances Control plans to begin removing lead-tainted soil from 2,500 residential properties near the shuttered Exide Technologies battery recycling plant in Vernon.

    The cleanup — the largest of its kind in California history — spans seven southeast Los Angeles County neighborhoods, where plant operations have threatened the health of an estimated 100,000 people.

    More than two years after the possibility of federal criminal charges forced the plant to shut down, however, the state has refused to release crucial information about the contamination and cleanup requested by lawmakers, community members and reporters.
    Regulators say lead emissions from the Exide plant drifted across an area of more than 10,000 residential properties spanning seven communities: Bell, Boyle Heights, Commerce, East Los Angeles, Huntington Park, Maywood and Vernon. The affected neighborhoods are predominantly Latino, with about 30% of people living in poverty; the countywide poverty rate is 18%.

    Crews so far have tested the soil of more than 8,200 properties. In its July 6 cleanup plan, the state summarized sampling results for more than 7,000 of those — and more than 98% showed lead levels exceeding 80 parts per million, California’s health standard for residential soil.

    The toxic substances control department has released spreadsheets containing detailed sampling data on about 1,900 residential properties, and recently made public the addresses and parcel numbers of a few dozen child care facilities where crews sampled the soil or detected elevated lead levels. But the department has not released the precise locations of homes tested.

    The Times has sought sampling results by parcel, address, map coordinates and block number, based on the public’s right to know the extent of contamination and how the government is spending public funds.

    The toxic substances department argues that disclosing such information would compromise residents’ privacy, expose sensitive health information and discourage participation in soil sampling and cleanup. Though the data pertain “to soil lead levels, not personal blood lead levels,” department lawyer James Mathison said in a March letter, “there is a potential correlation to be made between identifying particular locations with high soil lead levels and correspondingly high blood lead levels” of people living there.

    More than half of the households surveyed recently by county health officials reported that they have not received results from the soil testing completed in their yards. Figures released by the toxics department show that as of late July, it had yet to send results to more than 2,000 parcels — about one-quarter of those tested.

    Officials said more results are being mailed to residents weekly.

    Georgia-based Exide, which acquired the plant in 2000, has said its lead emissions did not extend into residential areas — and has pointed the finger at other industries, lead-based paint in older homes and past emissions from vehicles.

    The company filed a lawsuit last year seeking blood lead data on people tested in L.A. County, including each person’s age, city and ZIP Code; the age of the home in which each person lived; and any causes of lead poisoning. The state is fighting the lawsuit in court, calling it an attempt by Exide to dodge financial responsibility and blame the contamination on lead paint and gasoline.

For more, see What we know about California's largest toxic cleanup: Thousands of L.A. County homes tainted with lead.

Go here for other posts on the lead contamination of residential properties. lead contamination epa environmental protection agency

Sunday, September 03, 2017

About 100 Residents Get The Boot On 24 Hours Notice After Multiple Uncured Code Violations Force County Fire Officials To Shut Down Financially Struggling, 7-Story Twin-Tower Complex Offering Cheap Lodging

In Temple Hills, Maryland, The Washington Post reports:
  • About 100 people were ordered out of two squalid Temple Hills condominium buildings Tuesday [August 22], but a group of defiant residents said they are not leaving because they have nowhere to go.

    Fire officials warned the manager, owners and tenants of Lynnhill Condominiums last week about multiple fire-code violations, including towering piles of garbage in trash chutes and trash storage rooms, inoperable fire doors and a broken alarm system.

    The seven-story twin-tower complex on Good Hope Avenue has struggled with finances and repairs for more than a decade. Utility companies have periodically shut off water and power over unpaid bills, and the Prince George’s County government has taken the condominium association to court repeatedly over code violations.

    “We want to avoid an Oakland or London situation,” said Thomas Himler, a top aide to County Executive Rushern L. Baker III (D), referring to two recent deadly fires at decrepit buildings in those cities. “This is a life and safety issue.”

    While property managers and residents made an effort over the weekend to correct the code violations, Prince George’s County fire department spokesman Mark Brady said, 14 of the 23 issues cited were not fixed by Tuesday morning’s deadline.

    Among other things, Brady said, the company failed to produce its annual certification of the fire alarm system, which had been working only intermittently

    Condo owners and renters have until noon Wednesday to clear out.

    “It was obvious that there was work in progress, but unfortunately they could not get it all done,” Brady said. If the remaining problems are adequately addressed, he added, inspectors will return to see if residents can remain in the building.

    For those who depend on the cheap lodging the building offers, the order to evacuate felt like a sucker punch.

    “What am I supposed to do? I live here, I have nowhere to go,” one angry resident said, interrupting Fire Chief Benjamin M. Barksdale as he read the evacuation order Tuesday. “Twenty-four hours — what is that going to do for me?”

    Dominique Griffin, an unemployed single mother, said she has been living on the second floor of one of Lynnhill’s buildings since March. She communicates with her landlord only by text message, leaving a $500 money order to pay her monthly rent in a drop box at the front of the building.

    She said she was unaware of the severity of the complex’s problems until Tuesday’s announcement. But Griffin, 29, also has few other options.

    “The landlord was eager, and it was a cheap deal,” she said Tuesday from her apartment, where the two infants she was babysitting were napping on the floor.

    Griffin’s voice was raspy. She said she coughs often in the building, where fungus grows uninhibited after water seeps in from rain showers, and black mold creeps up from underneath the laminate.

    “This is my home. This is all I have. I don’t have nowhere to go,” Griffin said. “Our landlords and managers failed us.”

    Property manager James Braxton and condo owner Stanley Briscoe, who sits on Lynnhill’s board of directors, said the complex — which is looking for an investor willing to buy and repair the building — was not given enough time to address the code violations.

    “The county knows our plight,” Briscoe said. “All we ask is a reasonable amount of time to get these services take care of.”

    Some residents theorized that the county government is trying to move them out because Lynnhill sits on valuable land near Naylor Road Metro station — a theory that county officials vehemently denied.

    The county’s Department of Social Services is working to find short- and long-term housing for displaced residents, although some Lynnhill occupants said Tuesday that they were not getting the help they were seeking from the hotline number they had been told to call.

    The agency also worked with Lynnhill residents in October, when utilities were shut off. But since then there has been significant turnover, including new renters and squatters, said DSS Director Gloria Brown Burnett, even though the building has not had valid rental licenses since 2010.

    “We are prepared to relocate and figure out housing for as long as it takes, but we need people to work with us on case management,” Burnett said. “We are trying to mitigate the challenges and help residents recognize the urgency to leave.”

    County officials said they will locks the doors of the complex Wednesday and control movement in and out of the buildings. Residents and owners can make arrangements to move out large items.

Foreclosing Bank Announces Building Closure After Being Left Holding The Bag On Aging, Dilapidated, Crime-Ridden Apartments, Forcing Over 100 Poor Families To Scramble For Scarce, Affordable Housing

In New Orleans, Louisiana, The New Orleans Advocate reports:
  • After widespread maintenance and crime issues within the Chateu Lane apartments in New Orleans East, the complex is slated to be shut down, according to a report from WWL-TV, leaving more than a hundred families out of a home.

    The apartment building, located at 6000 Chef Menteur Highway, has been foreclosed and failed to sell at auction, according to the report. Gulf Coast Bank now owns the property, and will no longer rent it to residents.

    The company managing the property, Latter and Blum, offered residents $1,000 reimbursements for moving out by Aug. 31.

    Multiple residents said they have nowhere else to go, and because the apartments don't qualify for Section 8 subsidies, they have been paying with their own money.

    "How could we up and find houses like that, and we just had to take them [kids] to find school clothes, tennis shoes and all that stuff and make sure our children go to school?" asked Charlene Walker, one of the residents, in an interview with WWL-TV.

    Widespread maintenance issues within the complex were detailed in April, and it has been the scene of at least three killings since 2016.

    Also this year, both the personal and unmarked service vehicles of a New Orleans police officer turned up at Chateau Lane after they were reported stolen. A carjacking and kidnapping incident was also reported as occurring at Chateau Lane in January.

Aging, Antiquated Structure, Multiple Building Issues Force Nursing Home Operator To Shut Down Care Home; Emotions Run High For 89 Vulnerable, Soon-To-Be Displaced Residents & 128 Employees

In Parksley, Virginia, reports:
  • Riverside Health System announced Tuesday [August 22] it will close its nursing home in Parksley in October because of "multiple building issues," including recurrent flooding and a recent lightning strike that affected the fire panel.

    The facility's closing affects 89 long-term residents and 128 employees.

    "It was a very difficult decision," said Bill Downey, president and chief executive officer of Riverside Health System.

    "The facility is very old. It is very dated. It had a severe water problem that we worked through to keep our residents and team members safe — but on top of that, we have continued to have issues with flooding as well as ... recently, the building was struck by lightning that caused a problem with our fire panel," Downey said.

    "When you take all of those together, it came to the decision that it was in the best interest of the residents to close that antiquated facility," he said.
    The health care organization will work until then to find placements with an appropriate level of care for 89 long-term care residents.
    Riverside is meeting with employees to help them find employment either within the Riverside Health System or elsewhere, the release said.

    Resume writing and interviewing skills support also will be offered.

For more, see Parksley nursing home will close, displacing 89 residents.

See also, Parksley nursing home: Hard times ahead with Riverside closing, officials say (Emotions run high as job loss, reality of mainland Virginia facilities move realized).

Saturday, September 02, 2017

Regional Authority OKs $235K In Free Money To Mobile Home Park Landlord For Infrastructure Upgrades In Exchange For Commitment To Allow Lot-Leasing Homeowners In 189-Pad Park To Remain Without Unreasonable Future Rent Hikes

In Corcoran, Minnesota, the Star Tribune reports:
  • The Metropolitan Council voted Wednesday [August 23] to award nearly $235,000 in a pilot grant to a Corcoran mobile home park as part of a broader effort to protect and preserve affordable housing in the region.

    The first-of-its-kind grant will help Maple Hill Estates connect to the regional wastewater system in place of its aging, on-site septic system. In return, the park owners have committed to continuing to operate the property as a mobile home park without “unreasonable lot rent increases.”

    The grant comes on the heels of a steady string of mobile home park closures across the metro, where no new parks have been built since 1991. The Met Council estimates that nearly 37,000 people in the region lived in manufactured housing in 2016, representing a significant source of affordable housing, especially for low-income households.

    “The region is looking at an affordable housing crisis,” said Met Council Chairwoman Alene Tchourumoff. “This is one way that we can look at trying to be innovative about the crisis.”

    Maple Hill Estates is the second largest mobile home park in Hennepin County, where only six parks remain. Half of the county’s mobile home parks have closed since 1991, with Lowry Grove in St. Anthony among the most recent.

    “At a time when we can’t even produce enough [affordable housing] for current and future demand, losing any of the existing stock only puts us further behind,” said Jonathan Stanley, a Met Council planning analyst.

    Aging infrastructure represents a common challenge for mobile home parks, and connecting to the regional wastewater system can be costly. The pilot grant provides a 50-50 match to help defray the Met Council’s Sewer Availability Charge, a fee that will cost the 189-lot park in Corcoran about $470,000.

    “It’s very difficult financially,” said Brad Martens, Corcoran’s city administrator. “This helps that [connection] be able to happen without passing all those costs onto the residents.”

    Residents of color make up 40 percent of Maple Hill Estates, compared to 12 percent of Corcoran residents overall, according to the Met Council.

    About 500 people live in Maple Hill Estates, which offers families access to good schools and other suburban amenities in the 5,500-population city where the median household income is nearly $100,000. The mobile home park accounts for 78 percent of the city’s affordable housing stock.

    “Maple Hill Estates really is one of those opportunities to live in Corcoran when you maybe couldn’t otherwise,” Martens said. “It’s an integral part of Corcoran.”
For more, see Met Council works to preserve mobile home parks with first-of-its-kind grant (The nearly $235,000 grant will help Maple Hill Estates in Corcoran connect to the regional wastewater system).

44 Lot-Leasing Homeowners To Dodge Boot, Leveraging Professional Assistance From Nonprofit, Free Federal Money For Infrastructure Upgrades To Form Co-Op, Buy Out Retiring Landlord

In Castleton, Vermont, the Rutland Herald reports:
  • Robin Crowningshield said she had to step up to stay put.

    Crowningshield is chairwoman of the Windy Hollow Mobile Home Cooperative, which is preparing to take over the similarly named mobile home park on River Street. The organization is buying the park, with the help of the Cooperative Development Institute, and upgrading its infrastructure with a $362,000 federal grant.

    CDI consultant Sarah Martin said the organization advises cooperatively owned communities around New England through their first decade of existence. She said cooperative ownership of mobile home parks is on the rise and that she believes Vermont has seven such communities.

    “The main function is to keep rents low, keep infrastructure up to date and keep everything safe in the community,” she said. “Generally speaking, nonprofit- owned parks and cooperative parks … they’re not going to charge any more than they actually have to.”

    The drawback, she said, is they require more involvement.

    “You need to make sure you have a board of directors that’s willing to work, willing to volunteer,” she said. “That’s easier in some communities than others. We’ve been pretty lucky in Vermont, but a lot of times you have people who just want to pay their rent and go about their day-to-day.”

    Crowningshield, 56, an administrative assistant at Fair Haven Union High School, has lived with her husband in Windy Hollow for 12 years. She said it is a mix of older people and families.

    “It’s not a trailer park — it’s more of a community,” she said. “We’ve got quite a bit of lawn space. I’d say I’ve got about a quarter of an acre. It’s a nice little neighborhood, quiet.”

    Forty-four families live in Windy Hollow, and Crowningshield said she does not believe it will get any bigger.

    About two years ago, she said, they all received notice that owner Joe Howard was selling the park.

    “It’s kind of worrisome to find out you might have to pick up and move where you live,” Crowningshield said. “Then the state and CDI got ahold of us and gave us some options.”

    Josh Hanford, deputy commissioner of the state Department of Housing and Community Development, said his agency got involved because the park had septic, water and drainage issues that meant it was likely to close if the owner couldn’t find a buyer with the funding to deal with them.

    He said the town applied on the cooperative’s behalf for the community development block grant— federal money administered by the state — to do the repairs.

    “The displacement and trying to find replacement housing probably would have cost the state a lot more than this,” he said.

    Crowningshield was elected to head up the board at a meeting held at the community center.

    “ I spoke too much, I think,” she said.

    The sale has yet to close, but Crowningshield said the sale price will be roughly $1 million. Martin said CDI arranges financing so cooperatives don’t have to put any money down. Currently, the sale is pending an environmental review, required under the grant because the park is in a wetland.

    “ We’re in the home stretch and we’re hoping it’s all going to be over and done with in a couple months time,” Crowningshield said.
Source: Tenants to buy, upgrade mobile home park. aging infrastructure

City Leverages Disaster Relief Funds To Buy Out Mobile Home Park Landlord, Promises Residents Infrastructure Upgrades, No Displacements, Search For Long-Term Owner Such As Co-Op, Nonprofit To Ensure Affordability, Stability

In Boulder, Colorado, the Daily Camera reports:
  • Boulder has purchased the Ponderosa Mobile Home Park, a Boulder County enclave in the northern part of the city, which it hopes will ensure long-term affordability and address conerns regarding the state of the park's infrastructure.

    The city bought the 6.46-acre piece of property from Mantle Ranch Real Estate LP for $4.2 million, and $3.5 million of that came from a federal grant providing for disaster relief stemming from the 2013 floods, according to a news release. The park was impacted by the flooding.

    The remainder came from the city's affordable housing fund, according to a news release.

    The 68-unit trailer park, at 4475 Broadway, is currently located in Boulder County, and has been since the 1950s. Over time, the city limits have changed as such that the property is now surrounded. Providing utilities, health and safety services has been challenging and required coordination between Boulder, Boulder County and the property owner, according to the release.

    The property will eventually be annexed into Boulder with infrastructure upgrades in 2019. The city will work with residents to identify a long-term owner such as a cooperative or nonprofit to ensure long-term affordability.

    The city has promised residents at the park that they will not be displaced because of the sale.

Friday, September 01, 2017

Mobile Home Park Tenants Struggle With Homelessness After Being Rented Condemned Trailers, Then Getting Booted By Local Code Enforcement Without Notice Soon After Moving In

In Tucson, Arizona, the Arizona Daily Star reports:
  • Seeking the desert climate, Donna and Derek Wilson moved their five children from southeast Texas to Tucson this summer.

    The dilapidated mobile home they rented at 110 E. Prince Road needed serious work, the couple admits. But it was walking distance to public schools and it seemed to have the makings of a home.

    “I cringed a little bit, but I was happy we had our own place,” Donna Wilson said. “We were gonna fix it up.”

    They quickly realized the trailer’s problems were more than cosmetic when monsoon rains streamed through leaks in the roof throughout July.

    Now the family is fighting to avoid homelessness, after city code enforcement on July 31 informed them and two other families that their rented trailers had been condemned as uninhabitable — months before they moved in.

    The three families were forced to vacate their homes by the end of the day. Two other tenants whose trailers were condemned during the July 31 code inspection also had to leave immediately.
    Since they were displaced, the Wilsons have stayed in four different hotels as they scramble to find a permanent place to stay. For more than two weeks, the seven-member family, plus a scrawny kitten named Spooky, was crammed into a single room at the Travel Inn motel on South Freeway Road, rotating who had to sleep on the floor.

    “I hate to see anyone else go through this,” Wilson said. “We have no money right now. I’m scared. ”
    Prince Road Park has been on code enforcement’s radar, especially after faulty electrical wiring caused a trailer fire a few years ago, said Martin Romero, supervisor with the city’s code enforcement department. A call from police investigating criminal activity at the property prompted the July 31 code inspection, he said.

    Problems in the condemned trailers included hazardous wiring, broken toilets falling through the floor, roaches, broken cooling systems and roof leaks, Romero said.

    “The property owners should be aware of the type of units they are renting out,” he said. “We expect the property owners to be in compliance with all of our city codes.”
    [The out-of-state landlord] blames one of the park’s tenants for renting out the condemned trailers without his knowledge.

    “Whoever that woman is, she rented those out on her own,” he said. “I don’t even know how she got the keys. She was not the manager.”

    On a recent afternoon at Prince Road Park, that woman, Elizabeth Keith, said she was the latest in a series of tenants who were acting as the park’s property manager, with Kroepel’s consent.

    She maintains that Kroepel asked her to be his “point of contact” and to get more tenants moved into the vacant, money-draining trailers. She said Kroepel refused to pay for any repairs and she did not know which trailers were condemned.

    He “refuses to do anything for his tenants and refuses to do anything for his managers,” Keith said.

    Kroepel said he was unaware so many trailers had been condemned at his property, which was featured in a December Star article on dangerous conditions in Tucson’s trailer parks.

Single Mom Gets Stung In Craigslist Rent Scam, Paying $4K To Move Into Rental Home, $5K In Needed Repairs Only To Find Out Property Was A Bank Foreclosure & Purported Landlord Was A Scammer

In Chicago, Illinois, WBBM-TV Channel 2 reports:
  • A mother in the South suburbs moved into a dream house with her kids, only to learn she had been scammed.

    As she now faces eviction, CBS 2’s Jim Williams reports this incident is a warning for other renters.

    Rhonda Reynolds Ford said she first saw the comfortable Country Club Hills home advertised on Craigslist and met the man she thought was the owner at the residence.

    “He had the keys — we walked right in the front door,” she recalled. “He said this was his house, that he had a couple of other people who were interested in it.”

    Wasting no time, Ford jumped on it, and signed a lease in December of last year. She says she paid the first month’s rent as well as a security deposit, $4,000 altogether, in cash.

    “There were leaks all throughout the house. I had to put plumbing in downstairs and repair the leaks,” Ford said, which cost her an additional $5,000.

    However, a couple of months later, Ford learned the man she paid did not own the house. “I think it’s disgusting to take from people who are trying to live and struggle to make it day by day. How can you do that to somebody?”

    In addition to her own children, Ford’s four young nieces also live with her.

    “I’m feeling — I feel like I’ve got these kids to take care of,” Ford said, choking up. “And I don’t have anywhere for them to go. What am I going to do?”

    Ford is currently on an unpaid medical leave from work, which is adding to her difficulties.

    CBS 2 called the man who posed as the landlord, but there was no answer. It remains unclear how he had the keys to the house.

    The attorney representing Wells Fargo Bank, which is the bank taking Ford to court, said he could not discuss the case.

    Eileen Boyce of the Illinois Attorney General’s said the office has received 50 complaints since 2015 of people posing as landlords to scam renters. Boyce suggests renters check public records to make sure landlords and property management companies are legitimate.

Thursday, August 31, 2017

Anonymous Call To Abuse Hotline Triggers Probe, Subsequent Arrest Of Woman Suspected Of Abusing POA To Steal Money From Elderly Mom; Loot Believed To Include Proceeds From Sale Of Victim's Home

In Yulee, Florida, WJXT-TV Channel 4 reports:
  • A woman was arrested Friday [August 25], accused of exploiting her own mother for financial gain, the Nassau County Sheriff’s Office said.

    Venetia Mitchell, 62, of Yulee, was taken into custody and charged with one count of exploitation of an elderly or disabled person.

    According to an arrest warrant obtained by News4Jax, the criminal investigation into Mitchell began in mid-May when an investigator from the [Florida] Department of Child and Families contacted the Sheriff’s Office about an anonymous call that came to the Abuse Hotline.

    The caller said an 84-year old woman with an undisclosed illness was being exploited by her daughter, Mitchell, who is also the alleged victim’s power of attorney.

    The caller’s concern was that Mitchell had been using proceeds from the sale of her mother’s home, banking accounts and money market accounts for her own benefit.

    According to the caller, Mitchell took money from her mother’s bank account to purchase a vehicle and jewelry. The caller also reported that Mitchell spent $200 at a grocery store but there was no food in the home the next day and that her mother has very little money in her bank account.

    The DCF investigator provided Nassau County detectives with copies of checks Mitchell allegedly wrote and signed using her name or her mother’s name.

    According to the Sheriff’s Office, the case is still under investigation.

    Nassau County jail officials told New4Jax that Mitchell is now out of jail after posting a $5,000 bond.

    Mitchell is no stranger to trouble. A background check revealed she had been previously arrested in Hillsborough County in 2007 and charged with theft and possession of cocaine. In 2005, the Hillsborough County Sheriff’s Office arrested and charged Mitchell with battery. It’s unclear if those prior arrests resulted in convictions.
Source: Woman charged with exploiting her 84-year-old mother (Police say woman stole money from mother's bank account). POA abuse

Cops: Caregiver Emptied Out Vulnerable Man's Bank Account, Stiffing His Landlord, Leaving Him Broke, Causing Victim To Get The Boot

In Ninety Six, South Carolina, the Index-Journal reports:
  • A Ninety Six man ended up homeless after his bank account was emptied by a woman who was caring for him, said Ninety Six Police Sgt. Cerrior Mansel.

    Zaketa Shandrell Peterson, 29, of 401 S. Cambridge St., Ninety Six was arrested Wednesday and charged with obtaining money under false pretenses and breach of trust with fraudulent intent.

    The man's caregiver convinced him to put her on his bank account, and after his account came up empty, he was evicted for unpaid rent, Mansel said. On Aug. 10, officers went to speak with him because a woman had his credit and personal identification cards, according to a report.

    The man told officers he didn't know she had them, and said he was being evicted and the woman was supposed to be paying his bills, the report said. She was his caregiver, and had access to his bank account, the report said.

    Officers found surveillance video showing the caregiver withdrawing money from the man's account at two different ATMs at a bank, Mansel said. When asked, the caregiver told officers the man was waiting in the car for her and the money was taken with his permission — but when pressed on details, she said the man was home sick, Mansel said.

    The woman told officers she was added onto the man's account because she was his caregiver, Mansel said, but records showed she was on his account about a month before she started working for a caregiving agency.

    Mansel said police believe Peterson might have taken money from others.

    "If anyone recognizes her and has been a client of hers, call your respective law enforcement agency," said Ninety Six Police Chief Chris Porter.

    Ninety Six police can be reached at 864-543-3122, and the Greenwood County Sheriff's Office can be reached at 864-942-8600.

Wednesday, August 30, 2017

Special Home Mortgages For Seniors Experience High Default Rates, Despite Terms Requiring No Periodic Loan Repayments

From a recent story in The Washington Post:
  • [A]cross the nation, an increasing number of seniors are facing foreclosure after taking out reverse mortgages, either because they fell behind on property charges or failed to meet other requirements of the complex mortgage loans, according to federal data and interviews with consumer and housing specialists.

    “Folks who had expected to age in place and live for the rest of their lives in their home are now having to scramble to find a new place to live,” said Odette Williamson, a staff attorney with the Boston-based National Consumer Law Center, which advocates for consumer justice for low-income people. “People just don’t know where to turn. It’s heartbreaking.”

    The federal Department of Housing and Urban Development, which insures most reverse mortgages in the country, says it lacks detailed data on how many homeowners have lost their homes or are facing foreclosure in the program, which was launched in 1989 and covers about 636,000 loans. Nationstar declined to comment for this article.

    But a HUD report issued last fall found that nearly 90,000 reverse mortgage loans held by seniors were at least 12 months behind in payment of taxes and insurance and were expected to end in “involuntary termination” in fiscal 2017. That’s more than double the number the year before.

    Losses in the senior mortgage program have been a drain on the Federal Housing Administration’s mortgage insurance fund that supports all single-family loan programs, including traditional forward mortgages and reverse mortgages.

    HUD spokesman Brian Sullivan said the agency has tightened the requirements to reduce defaults for new loans going forward. It’s a necessary measure as its reverse mortgage portfolio — whose value can go down with defaults or home prices and property values if homes fall into disrepair — was valued last fall at negative $7.7 billion.

    Still, he said, reverse mortgages are “a critical resource for seniors who wish to access their accumulated home equity and age in place.”

    Before 2015, the only thing homeowners ages 62 and older needed to qualify for a reverse mortgage was equity in their home; lenders weren’t required to determine whether they could afford to maintain their homes or cover tax and insurance payments in the future. Some homeowners used the funds to pay off the original mortgages or ran out of money after covering living expenses over many years. Now HUD requires all borrowers to undergo a financial assessment to qualify, to make sure they will be able to pay their taxes and insurance.

    But tens of thousands of troubled loans remain. More than 18 percent of reverse mortgage loans taken out from 2009 to June 2016 are expected to go into default because of unpaid taxes and insurance, according to the HUD report. That compares with less than 3 percent of federally insured loans that are considered seriously delinquent in the traditional mortgage market.

    Joanne Savage, an attorney with AARP’s Legal Counsel for the Elderly, said that seniors [] are the victims of a past system. She joins other advocates who argue that HUD and lenders should work harder to help troubled borrowers facing displacement for relatively small debts compared with the value of their homes.

    “There needs to be a little more mercy,’’ Savage said. “We are going to have a steady stream of these clients for five to 10 years.”
    Borrowers can receive 50 percent to 66 percent of the value of their equity, depending on their age and the interest rate, generally set at about 5 percent. For example, a 73-year-old with a home worth $100,000 and no current mortgage could receive a loan in a lump sum or monthly installments, or a line of credit, of up to $57,900, not including closing costs, according to HUD.

    The debt increases each month with interest on the loan, and in many cases fees to the servicer and an insurance payment to HUD, which guarantees to take over the debt from the lender when it grows bigger than the value of the house. The loan comes due when the borrower dies, moves or violates loan requirements. At that point, owners or their heirs who want to keep the home can pay the debt or 95 percent of appraised value of the property — whichever is less. Or they can walk away from the house.


Managing Agent Gets Pinched For Allegedly Forging Condo Board Members' Signatures To Illegally Siphon $100K From HOA's Line Of Credit, Using The Loot As His Personal Spending Cash

In Hackensack, New Jersey, reports:
  • A Hasbrouck Heights man is accused of embezzling $100,000 from the accounts of a Bergen County-based condominium association in a five-year scam, prosecutors said Wednesday.

    Raymond Gonzalez, 62, was charged with theft by deception and forgery after an investigation that stemmed from a March 2016 complaint, according to Bergen County Prosecutor Gurbir S. Grewal.

    As operator of the condo association's management company, Gonzalez had access to a line of credit account used by the organization, authorities said.

    "Gonzalez removed monies from the account, transferred them into accounts held by his management company and used them for his personal benefit," Grewal added in a statement.

    "In an effort to write fraudulent checks from the account, Gonzalez forged the signatures of two of the condominium association's board members," the prosecutor said.

    The alleged scheme continued between 2011 and 2016. Officials said Gonzalez was released ahead of a court appearance set for Sept. 6.

Tuesday, August 29, 2017

More On Private Equity Outfits' Use Of Contract For Deed Scams To Fleece Unsophisticated Buyers With Crappy Credit Aspiring To Own A Home

From a recent opinion commentary in The Guardian:
  • [L]ike a strain of virulent TB that was thought eradicated, this predatory practice has returned. This time, however, the perpetrators are not “mom and pop” landlords, but Wall Street private equity firms.

    In the aftermath of the 2008 mortgage meltdown, millions of people lost their homes to foreclosure, particularly across the midwest rust belt states. Fannie Mae disposed of thousands of these properties in bulk sales to Wall Street private equity firms, some with fingerprints leading back to the original subprime mortgage scandal that fueled the meltdown.

    The Dallas-based Harbour Portfolio Advisors was one of the biggest bulk buyers, acquiring more than 6,700 homes, mostly in Michigan, Ohio, Illinois, Pennsylvania, Georgia and Florida. Other Wall Street firms snapped up thousands of foreclosed units, including the South Carolina-based Vision Property Management, Battery Point Financial and the St Louis-based Apollo Global Capital.

    These Wall Street firms typically don’t invest anything to improve these properties, most of which are in terrible condition. Instead, they transfer them to potential buyers through “contract for deed” transactions – sometimes marketed as “rent to buy”, “seller financing”, or “installment land contracts”.

    These are not inherently predatory, but opportunities for abuse are plentiful. Such contract arrangements are not subject to the Truth in Lending Act or other consumer protections that most traditional mortgage borrowers enjoy.

    These contracts exist in a regulatory ‘no-man’s land’ between tenant protections and homeowner protections,” says Sarah Mancini, an attorney with the National Consumer Law Center. “These aspiring homeowners have neither.”

    Assuming all the risk, if contract buyers miss a payment, they can lose all the previous payments and investments they’ve made in maintaining the house. Because they are technically not owners, buyers may be quickly evicted under forfeiture procedure, without the increased protections of foreclosure law afforded to homeowners. Think “repo” of a car, not a home.

    Deploying contracts for deed, sellers receive income streams from rundown properties that would be unbankable with traditional mortgages and unsuitable for renting because of code violations. In the most predatory scenario, sellers unload dilapidated houses on unsophisticated buyers with a contract for deed, locking them into an inflated purchase price and high interest rate. After paying out tens of thousands for repairs, a defaulting buyer loses all their equity. The contract lender gets back the house in better condition and repeats the cycle.

    “These contracts are the next wave of abuses motivated by corporate profits,” says Mancini. “They are exploiting the same communities of color that were devastated by the subprime crisis. This is just the latest predatory product.”

For more, see Loan sharks were meant to be eradicated. Now they're back. land contract for deed rent to own rackets

New Illinois Law Aims To Provide Some Protection For Aspiring Homebuyers Targeted By Sleazy Real Estate Operators With Rent-To-Own, Contract For Deed Ripoffs

The Pekin Daily Times reports:
  • A measure sponsored by two Peoria lawmakers would offer new protections for people who enter into “rent-to-own” leases.

    Gov. Bruce Rauner signed Senate Bill 885 on Friday. It’s designed to regulate contract-for-deed sales in which individuals gradually build up equity in a home with their monthly rent payments to the owner, eventually becoming the property owner themselves.

    State Sen. Dave Koehler and state Rep. Jehan Gordon-Booth, both Peoria Democrats, said that the aim is to prevent people — particularly in now-income areas where people might have difficulty getting traditional bank financing — from being taken advantage of by unscrupulous sellers.

    “Deceptive lending practices are a recipe for financial disaster,” Koehler said Friday night. ”‘Rent-to-own’ leases are often misleading and will hit consumers with ballooning costs and hidden fees. This new law brings transparency to consumers and guarantees they are armed with enough information to make a well-informed decision.”

    The legislation requires individuals selling three or more homes on a contract-for-deed basis — effectively limiting it to people who are in the business of such sales — provide buyers with an amortization schedule so they know how quickly they are building up equity in the home, and lays out the process for foreclosure more strictly.

    The bill passed both houses of the Legislature unanimously, and was the product of lengthy negotiation with groups representing real estate agents, lending organizations, affordable housing agencies and the state attorney general’s office.

    The bill becomes effective Jan. 1, 2018.