Help me please!

User Forum Topic
Submitted by marion on October 26, 2007 - 3:35pm

Hi, I'm looking for opinions/suggestions. Here's my problem. I've been renting my current home in the Inland Empire for almost 3 years. Well, after 2 years on a lease, the owner didn't have me renew the lease so I'm on a month to month. Here's my problem though: The owner is having/or has had financial problems. The first mortagage holder on this property filed a notice of default and it was going into foreclosure but the second mortgage holder brought the loan current so they wouln't lose out on their investment (The owner has a second on this house for 38,000 dollars). Now here's where this gets ridiculous:

The second mortgage holder is his mother (it's her company). But, she didn't put up the money for the second personally. She got it from a private investor. The owner (her son) says his mother owes him money, hence he will not pay the mortgage and is forcing the mother to pay each month to keep the loan up. Well, the mother has begun forclosure proceedings because the second is now in default. The owner tells me don't worry, he has hired an attorney and his mother will be blocked from forclosing on this property. Well, I'm caught in the middle. The mother has sent me an "assignment of rents" and asked me to pay her the rent money. The son tells me to ignore the mother and continue to pay him the rent (but he's not paying either the first mortgage or the second). He promises me things will be ok and I'll continue to have a place to live.

So, what do I do? Do I keep my money and live here until him mother forecloses? If so, he might evict me. Do I just not pay him on the first of the month and find someone else to live? Do I pay him mother or him? Do I stay or do I go? The mother has been calling me almost in tears telling me how wrong her son is doing her. The son is telling me his mother is a snake. I'm sick of it all!

What would you guys do?

Submitted by nostradamus on October 26, 2007 - 3:42pm.

I'd live there and not pay anyone until they settle it themselves. Neither of them is in much of a position to demand anything from you.

Submitted by marion on October 26, 2007 - 4:12pm.

Hi, nostradamus. Thanks for your reply. I would like to stay here and not pay, but can't the owner evict me if I don't pay?

Also, if they do get this settled, do you think I can trust the owner will continue to rent this house out to me. Or am I just stupid and naive to think my future is secure in this house for another year at least? The owner says he will give me another year's lease. Am I stupid to remain here and trust this owner?

Submitted by bsrsharma on October 26, 2007 - 4:12pm.

"assignment of rents"

I am curious about the contents of this letter. Can you post it's contents (after removing any personally identifying info, if you want)? An easy solution would be to get out of that snake pit. With thousands of empty homes standing in IE, somebody will pay you to rent the place just so it won't burn down in the next firestorm!

Submitted by marion on October 26, 2007 - 4:53pm.

Hi, here is the "assignments of rents" they sent to me:

TO: All TENANTS IN POSSESSION

Attached is a copy of the Deed of Trust executed by John Doe and Jane Doe, husband and wife as community property with right of survivorship.

This document gives XXXX mortgage corporation, on behalf of the beneficiaries, authorization to demand payment of all future rents due and payable through or at our office located at:

Mailing address: XXXXXXX
Physical address: XXXXXX

You will be issued a receipt and the funds will be held in trust to client account # XXXXX

This, in no way, affects your rental agreement and by paying your rent directly to XXXXX Mortagage Corporation as Servicing Agent under Contract, protects you from proof of non-payment of rent, as long as you provide a copy of the rental agreement to XXXXX Mortgage Corporation, and retain a copy of this order along with your rent receipt in your possession, you will be in compliance.

Please understand, wer are NOT a Property Manager and we are not responsible for any repairs to the property during this rent assignment period until notified to the contrary.

Your landlords will either reinstate their privileges through this office, at which time, we will cancel the Assignments of Rents you have been served with; and, instruct you that you may once again make monthly rental payments according to your Landlord's instructions. YOU MUST NOT pay directly to your landlord until advised to do so.

Any questions concerning this matter, contact the undersigned. Otherwise, to prevent being in violation of this Assignment of Rents make all future rental payments as instructed agove. Please acknowledge receipt of this document below and return in the enclosed prepaid Federal Express Envelope.

Sincerely
XXXXXX
President/CEO

Submitted by nostradamus on October 26, 2007 - 5:04pm.

Hi Marion,

I really do think the best thing to do would be get out of there. Are you particularly attached to that place?

The biggest problem is you currently don't have a signed lease, thus have no leverage to argue that there has been a violation of your contract.

BTW I'm not an expert in these matters, just trying to give an unbiased viewpoint. My first reaction was wow, that's crazy!

Submitted by marion on October 26, 2007 - 5:07pm.

Not only that, the second mortgage holder (his mother) who sent the assignment of rents had the gall to send me this letter:

Dear John and Jane Doe (owners-her son and daugher-in-law)

Per our earlier conversation, wer are in agreement that perhaps the miscommunication the tenant (me) received from yourself regarding, the requirement for the tenant to pay the rent direct to XXXXX Mortgage Corporation, has now caused this particular person to, for lack of a better word, take advantage of the circumstances.

Regardless of where the rent is paid, there is a moral and legal obligation for that rent to continue and it is for this reason that we will first give you the opportunity within the next 2-3 business days to utilize a service from the attached recommendations which will serve the 3-day notice of eviction and start the judicial process a judgement for the rents as well as any costs incurred should the tenant move out without leaving the property in proper order.

We equally suggest that you have a conversation with this individual that is she is struggling financially and cannot afford to live in the home she should at least possess the integrity to work out a proper move out so that you could rent the property in order not to cause you to incur a default with the senior lien.

As we both agree, the senior lien has been reinstated; however, you still have the workout agreement that exists with our company when not a concern to the tenant other than complying regularly with paying rent in exchange for a place to live, which I assume Ms. Palmer is continuing to take advantage of.

We therefore require that you take immediate action through one of these companies attached, otherwise our next step as "mortgagee in possession" would be to hire an attorney to obtain action necessary to either cause payment of the lease or extraction from the property.

Sincerly,

XXXX Mortgage Company

****************************************

To forum members, it gets worse for me. I did not pay rent for 2 months because I thought the senior lien would foreclose. The second mortgage holder (his mother)saved the loan 2 weeks before it was due to go to auction. Now I would have to pay the owner an extra $500 a month on top of the montly rent to stay to get caught up. I did not pay because I thought the house was going to foreclose. Now he wants me to pay the back 2 months rent. I used that money for bills (maybe I shouldn't have) now I will be struggling if I stay here.

Can they evict me?

Submitted by marion on October 26, 2007 - 5:12pm.

nostradamus, I'm not attached and want to move anyway. It's my kid that's attached. But, I might just have to go, so I hope my kid gets over it. I really don't feel comfortable, because I'm unclear about the future of the property. Let's say the mother (second mortgage holder) does foreclose. What happens to me? Couldn't her company decide to sell the property? (Not that anything is selling anyway-I'm in Murrieta CA)

P.S. The owner has offered to give me a new lease, but it the mother forecloses won't that be null and void?

Again, the only reason I'm considering staying is because of my son, but he may just have to get over leaving his friends. :(

Submitted by bsrsharma on October 26, 2007 - 5:43pm.

Attached is a copy of the Deed of Trust executed by John Doe and Jane Doe,

If that document appears Kosher (i.e. the property owners signed away their right to collect rents, in case of default AND default has taken place i.e. you have a copy of NOD), I think you are on good legal ground to send your rent to the Assignee (the one who sent that letter).

I am still curious! Can you post that Deed of Trust too? You don't even have to hide any names (unless you want to) since it is a publicly recorded document.

Submitted by ucodegen on October 26, 2007 - 5:51pm.

Until foreclosure goes through, the person you are currently renting from owns the property. Your rental contract is with this person, not the holder of the second paper.

The owner of the second paper has to go through the process and become the owner before the rent can be legally demanded by them. The holder of the second paper as a contract with the purchaser, but not you. The two of them have to work it out, and you should presently be paying the 'owner' not the second.

You may want to warn the second that demanding payment direct from you as well as taking any action against you before their foreclosure completes.. is illegal(They have a lien against the property, but don't own it). Taking action against you for not paying the second before the forclosure is also illegal. Any attempt for the second to collect directly against you under threat of eviction is considered extortion.

You may also want to mention to the holder of the second, that they should work it out with the owner and not involve you. The second should mention to the owner that the second is a recourse loan, meaning that the holder of the second can go after other assets of the owner after foreclosure for the balance or deficit. The holder of the second may want to work out a signed agreement with the owner (signed by both) that the second gives up the right to pursue for any deficit in return for having the rent assigned and payed directly to the holder of the second while the property is going through the foreclosure process.

NOTE: I am assuming that the 'assignment of rent' was only signed by the second

Once foreclosure completes, the second can not go after you for any payments made to the owner prior to foreclosure.

I think the holder of the second paper was trying to 'shortcut' the process.

And don't short the rent like you did.. not a good idea. The owner can evict you for this, but not the holder of the second paper.

Submitted by ucodegen on October 26, 2007 - 5:53pm.

If that document appears Kosher (i.e. the property owners signed away their right to collect rents, in case of default AND default has taken place i.e. you have a copy of NOD), I think you are on good legal ground to send your rent to the Assignee (the one who sent that letter).

Only if both signatures are on the paper.

Submitted by ucodegen on October 26, 2007 - 5:55pm.

One good thing to do.. get the owner and the holder of the second in the same room and have them hash out exactly who you are supposed to be paying and who has eviction rights etc.

Submitted by ucodegen on October 26, 2007 - 6:02pm.

Another note on contract law.

There are circumstances with respect to the Deed of Trust that are interesting..

This deed of trust, since it effects rental payments and the rent, should have been revealed at the point of the lease being signed. It is very hard to bind someone to a contract that they were not a party/signator to, which may also affect whether the "Assignment of Rents" is even legal.

Submitted by bonfire on October 26, 2007 - 7:11pm.

Move!

Submitted by Raybyrnes on October 26, 2007 - 7:48pm.

"To forum members, it gets worse for me. I did not pay rent for 2 months because I thought the senior lien would foreclose. The second mortgage holder (his mother)saved the loan 2 weeks before it was due to go to auction. Now I would have to pay the owner an extra $500 a month on top of the montly rent to stay to get caught up. I did not pay because I thought the house was going to foreclose. Now he wants me to pay the back 2 months rent. I used that money for bills (maybe I shouldn't have) now I will be struggling if I stay here."

So they want you to pay for housing that you lived in and agreed to pay rent on. If some one has gall itit you.

"I use the money to pay bills"
SO you wered over spending in the first place.

Here what you need to do. Hook up with a motgage broker and get yourself one of these nice negative amortizaiton loans. Do a 100% finance wiht interest only payments. Find yourself a realator who will help you stretch to find a house that you can sneak into. Lever there for a month and make no payments. I mean rent, morgage, responsibilities. WHat do you care. Somehow you feel you don't have to pay.

Submitted by marion on October 26, 2007 - 8:25pm.

FYI, Raybyrnes. The owner was taking my money that was supposed to go towards paying the mortgage and pocketing it and using it for his personal expenses. How's that for "responsibilities"? The senior loan holder almost foreclosed on this house last month.

Maybe you ought to talk when you're in my shoes and don't know how long you will be able to live somewhere your children have grown attached to. I bet you own your home, don't you. Well, I don't have that good fortune right now. And I had enough integrity not to take out one of the so-called loans you mention above and not contribute to the housing mess this country is now in.

The owner lied to me for months. I had asked him previously if he was in trouble. He said "no". Thus he lied. He owes 2k plus legal fees for the homeowner's dues he hasn't paid for months! So, save your self-righteous lecture for someone who deserves it. What do you rent out property? I bet you do.

Submitted by sandiego on October 26, 2007 - 8:39pm.

Now that is something new on this website, a bitter renter trying to explain to this crowd that there are advantages to owning (like not being forced to move).

Submitted by Raybyrnes on October 26, 2007 - 8:42pm.

Rationalizing the fact that you don't wnat to pay your rent and have spent money that your shouldn't have doesn't change things a bit. Additionlly rationalizing that your kids loive the place that you can't afford doesn't change things. To me it is a simple quesiton of people not paying there bills and being deadbeats.

The owner provided you housing that you ahve lived in. Pay you bills and stop being a loser. If these are habits that you are going to teach your kids how far are they goig to get.

A better example is sitting down with them on a sunday with the UNion tribune and the couplon section and training them to save.

Let the kids live in things you can afford and training them to take pride in what they have. As you savce and move up they will recognize all the hard work it took to get there. That is called being a parent.

I fill you in on something else. It doesn;t get easier. College will be here before you know it. You think the governemtn should foot the bill for that too. Keep the excuses coming.

Submitted by The OC Scam on October 26, 2007 - 9:07pm.

Marion,
I was in almost the same situation and now I’m negotiating a purchase offer on the property that was in foreclosure at a 35% percent discount. I can tell you this forum is not the right place to have this discussion. There are a lot of people who post here with their heads up there rear end. They don’t understand these scum bags who purchased homes with NO F**K’N Money and think they are self proclaimed real estate professionals. Then renters like us who are riding the hill down back to reality in the housing sector are running into these RENT SKIMMERS who fell into subprime loans with the qualifications of having a heart beat and a fake social security number. The smart people like you tell them to take the subprime lottery wooden box and shove it between their legs!! Then these bow tie wearing people like Raybyrnes with his calculator taped to his or her forehead thinks you should pay money to the MOM and SON mortgage team who have just a much right to own as you. PUT your RENT into an escrow account like I did and hire a lawyer in case the bank asks for back rent. The only thing I agree with RAYBYRnes is that you shouldn’t spend the money intended for rent but place it safely and legally in the bank. You should speak with a lawyer that specializes in tenant law spend the 100 dollars for the consultation.
My little rent skimmer didn’t even have a job while my wife and I average 140K a year with over 100K in savings waiting consciously for lending to come back to earth along with the SQ ft price in the OC. THAT’S AMERICA and we all will pay for this sick package of greed calculate that RAYBYRnes!

This is happening all over this country so get use to it.

Submitted by The OC Scam on October 26, 2007 - 9:15pm.

Here is a good website to review after meeting with your lawyer and I would advise morons like Rabies or whatever their name is to read also before they speak on the subject!

http://www.hud.gov/local/ca/renting/tena...

Submitted by Raybyrnes on October 26, 2007 - 9:31pm.

OC Scam

I don't agree with what youa re doing either but there is a difference. Youo suggested that you have the moeny in an escrow account. Therefore if there is money to be paid you ensure that the right people get it. Additionally if you ahve the money socked away you ahd enough to pay your bills and this is meoney to boot if there is no oine to make a claim on it. Means you have not over exteded yourself.

This poster does not have the money for the place. She has already spent it. Therefore she is simply looking for a group to rationalize what she is doing. She is overextending herself on RENT. Are you kidding me. I'll make a bet she has a cell phone and Cable TV to go along with it. To somehow tell her this is OK. Sorry. I see a huge difference. She just wnats a free pass. Might as well institutionalize the practice. You might be good at that. You can advertise. Training Deadbeats to avoid paying rent and then justifying it.

Submitted by marion on October 26, 2007 - 9:57pm.

Raybyrnes, you are really sick. For the 2 years + that I have lived in this property, I have paid my rent on time. The two months where I did not was when I found out through a broker that the house was in default-on it's way to foreclosure. When questioned about it, the owner flat out lied. He said it was a misunderstanding. Then when sh*t hit the fan with his mother, I found out what a mess this is.

FYI, I was advised by a broker and real estate agent that the house was probably going to foreclose and not to pay the owner or his mother another cent!

Well, the mother saved it from foreclosing with the senior lien holder, but now the son will not pay his mother and who's to stop her company from foreclosing.

I don't have a cell phone and I don't have cable. Again, up until mother and son made a mess of things my rent was paid ON TIME FOR OVER 2 YEARS. The owner even tried to get me to buy it before the senior lien holder started foreclosure proceedings but I declined because I can get this same house for 250K less than what they paid in a year or two. Momma didn't raise no fools!

Submitted by marion on October 26, 2007 - 10:01pm.

And another thing...I'm not a deadbeat or loser. I'm a single mom who put herself through college when my ex walked out on me in 2004. I now have a Master's degree and am trying to land a good job right now. In one to two years, I will be an owner like yourself when the market crashes all the way down to the ground.

Submitted by The OC Scam on October 26, 2007 - 10:22pm.

Raybyrnes

I ask one question: What is the difference between a subprime mortgage loan holder who couldn’t afford the payment s and the renter they chose who couldn’t afford the rent?
Answer: Coequals
FYI
By the way Marion I’m not saying you couldn’t afford the rent I listened to what you wrote other than genius here. You just made an error of trusting the broker friend you should have discussed this with a lawyer. But the bottom line is you more than likely will get the money back and then use it for a down payment but you should be careful of this coming back to haunt you.
Here something you may not expect but I’m spending a couple thousand in lawyer fees to negotiate my purchase so if you would like to purchase this property you’re legally squatting in you should prepare to spend some of that escrow money after the failed auction.

Submitted by The OC Scam on October 26, 2007 - 10:41pm.

The post above is true that the trustor/ Person named on the title of the property is the person you are legally obligated to. However do not trust that this person will not get out of this mess and come after you which this is why the escrow account is very important! My landlord told me she letting the property go and we could stay here as long as we wish until the foreclosure happens but I kept the account deposits just in case she was lying!

Submitted by ucodegen on October 26, 2007 - 10:58pm.

FYI, I was advised by a broker and real estate agent that the house was probably going to foreclose and not to pay the owner or his mother another cent!

Brokers and real estate agents are not qualified to give this type of advice.. and they shouldn't be giving it.

Well, the mother saved it from foreclosing with the senior lien holder, but now the son will not pay his mother and who's to stop her company from foreclosing.

Who is to stop her from foreclosing? Only if the son comes up with the money! This is why I mentioned you have to follow property and contract law. You have a situation where both could be demanding the rental payment. The question is, who gets it. I would recommend that the mother take immediate action on the property. Until she does, it looks like the son(owner) gets the rent, not the mother(second lienholder), even in spite of the Deed of Trust. The way the trust is worded, it looks like she is trying to save him from himself. You don't want to get in the middle of that.

In addition, the mother(second) can't have it both ways:
Please understand, we are NOT a Property Manager and we are not responsible for any repairs to the property during this rent assignment period until notified to the contrary.
If you are a property manager, you can evict and demand rent. If you are only the lien holder you can only demand payments from the one who the loan is with, not any tenant on the property. If you are not the property manager or owner, you do not have the power to evict.

The real kicker here is that they are mother and son and both are demanding payments from the tenant instead of handling it between them. They will really NOT want this to go to court because the judge would not look well on their behavior.

Submitted by ucodegen on October 26, 2007 - 11:02pm.

@The OC Scam

The difference here is that the property owner is demanding payments and saying that he is NOT letting the property go.

Submitted by VoZangre on October 26, 2007 - 11:18pm.

Messy messy messy...

Mistake: spending your rent money.

Any mumbo jumbo they send you about "moral ethical" they oughta cram where their co-equal sphincter resists.

While you were in a pickle, nonetheless you ought to have realized that EVENTUALLY that rent would be due to SOMEONE.

Hang in there... best of luck...

Submitted by The OC Scam on October 26, 2007 - 11:59pm.

“The difference here is that the property owner is demanding payments and saying that he is NOT letting the property go.”

Correct and you are right! I agree but if it were me I would have held one month’s rent to save a deposit in order to start looking for a new place in 30 days! MOM and Son will work it out but renter will not ...unavoidability the renter will pay someone eventually. I really just wanted to rant on about Subprime scum that are trying to rent there junk loans without being up front with renters that they haven’t made a house payments since acquiring there bogus crisis loan which is rent skimming incase subprime gambler is reading . However in the end it really doesn’t matter! The real crisis is the 500,000 homes going into foreclosure across the country and the lead filled plastic toys from China effecting our children and don’t get me started the price of GAS!

Submitted by marion on October 27, 2007 - 12:13am.

"Who is to stop her from foreclosing? Only if the son comes up with the money! This is why I mentioned you have to follow property and contract law. You have a situation where both could be demanding the rental payment. The question is, who gets it. I would recommend that the mother take immediate action on the property. Until she does, it looks like the son(owner) gets the rent, not the mother(second lienholder), even in spite of the Deed of Trust. The way the trust is worded, it looks like she is trying to save him from himself. You don't want to get in the middle of that."

ucodegen, I'm already in the middle of it. A place where I don't want to be. The mother has already compared the situation and her son to giving money to a "crack addict". This woman called me up at 8:00 pm (I kid you not) and proceeded with a sob story of how her and her husband gave the son large amounts of money to purchase the house they live in and funded some other type of real estate investment for them. Either she was close to tears, or it was one helluva act. The son told me the mother owes him over 100k. They are not on speaking terms. The last I talked with the mother, the son said some things to her that was so horrible, she had to hang up on him.

The mother filed a notice of default on this property last month. The son says his lawyer will block it. The son is adamant that he's not going to lose the property. Does anybody on here believe him?

edited to add: OC, the mother sent me a whole packet on "rent skimming" said it's exactly what her son is doing. I guess he is. He hasn't paid his mortgage in over 6 months. Senior lien signed notice of default in August.

Submitted by Raybyrnes on October 27, 2007 - 12:15am.

Doesn't matter how long you had been paying rent. You owe two month rent and now say you don't ahve the money becaue you spent it on bills. How do you figure that you are somwhow going to dig out the way you are going?

If you want out here is your gameplan. Use the following link to the San Diego Housing Commission

http://www.sdhc.org/giaffordhousingnews1...

These properties are a hybrid of owning and renting. You need to get on list s and get prequalified and this take s time.

Additionally you need to get finance adn you obviously have no maney to put doewn so I would use the following link for getting financed

http://www.calhfa.ca.gov/

If you went to get a masters and have student loasn I would contact your current lender and request a deferrment or forbearance. The government proveds you with up to 6 years where you can postpone payment on Federal Loans without adversely affecting your credit. This will free up you monthly cashflow to make you required payments to other debtholder of yours.

Go through the properties and find one You like. Speak with Vicki at the housing commission. That is the way you will find you way out. If you had done this two years ago you would already be in an ownership situation.

Good Luck

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