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 Eugene on October 27, 2007 - 1:18am.

@marion

it escapes me why you thought that you could stop paying rent just because the property was headed into foreclosure. You have a contract with the owner of the property and it is your legal obligation to continue paying rent for this property for as long as the contract is valid. The contract terminates the day he loses possession of the house (the day he forecloses), not a single day sooner.

It is not in anybody's interest to evict you as long as you keep paying rent. They will need to resolve their financial conflict one way or another, and they'd rather do that with someone living in the house bringing a stream of money than with the house standing empty and gathering dust. If you get evicted, it will be hard for them to find a new tenant, given this muddy situation.

My recommendation:
* Try to get both mother and son in the same room and have them come to an agreement as far as who's supposed to get paid.
* If you can't, you should _probably_ be paying to the mother. If there is a valid Assignment of Rents and the owner did in fact go in default on his second mortgage, holder of the second mortgage (mother) gains the right to collect rent from you. What arguments does the owner offer against that?
* Offer to pay at least one month worth of rent if you can't pay them everything you owe.
* Keep an eye on the proceedings. If things get to the point where the property is finally foreclosed upon, you will probably get evicted anyway, be prepared for that.

Submitted by sandiego on October 27, 2007 - 9:32am.

Similar story:

Man misdiagnosed with fatal cancer seeks compensation after spending life savings

Tuesday, May 8, 2007 | 12:05 PM ET

LONDON (AP) - A man who said he spent his life savings after being told he had months to live is seeking compensation after doctors conceded they had got the diagnosis wrong.

John Brandrick, 62, was told two years ago that he had terminal pancreatic cancer, Britain's Press Association news agency reported. He decided to spend his remaining time in style, quitting his job and spending his savings on hotels, restaurants and holidays.

A year later, doctors at the Royal Cornwall Hospital in southwest England revised their diagnosis: Brandrick was suffering from pancreatitis, a non-fatal ailment.

"My life has been turned upside down by this," Brandrick said. "I was told I had limited time to live. I got rid of everything - my car, my clothes, everything."

Brandrick said he did not want to take the hospital to court, "but if they have made the wrong decision they should pay me something back."

Submitted by bsrsharma on October 27, 2007 - 9:48am.

made the wrong decision

Oh very sorry! Here is a correction: please take this Cyanide tablet and it will solve your problem.

Submitted by kaycee on October 27, 2007 - 10:55am.

"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."

Okay, here are the things that stand out to me.

#1) I am NOT sending rent to anyone who tells me that they expect me to pay them but won't fix anything that is broken.

#2) If anything breaks, the owner can't fix it because he isn't getting any rent

#3) It isn't my job as a renter to do family therapy and I wouldn't try.

#4) You're on month to month anyway, so nobody can hold you to future rent.

#5) GET OUT NOW. You got two free months out of it, consider that payment for putting up with this circus. I'm a Navy wife and have moved my kids plenty. Your son will be fine. It is Sat. Hit the pavement and find somewhere to new to live by tomorrow nite. Seriously.

#6) Congrats on putting your life back together as a single Mom. If you did that, you can do this. MOVE, now. You and your son don't need to involve yourself in another families issues.

Good luck!

Submitted by VoZangre on October 27, 2007 - 11:36am.

Hang up!!!

Do NOT engage, allow, this woman or the guy to bumrush you over the phone.

They are obviously caught up in a bizarre drama of their own making. ( Well, you helped a bit by not paying your rent.)

I'd follow those links sent by Mr Byrnes, thats some quality info...

get on your horse and HIGHTAIL it outta there...

Submitted by marion on October 27, 2007 - 2:53pm.

Raybyrnes, thank you for the links. I'm going to look into that. But, is there a housing commision for Murrieta or Temecula? I'd like to stay in this area. If I got on the waiting list for those homes on the San Diego Housing Commision, I'd have to move to San Diego. But, I'd be getting into something that's very much below market from what I read...Could I resell that for a profit if I did not want to live in San Diego?

I didn't mention that the house I'm in is next to some horrible neighbors. The lady takes in foster kids. What the owner did NOT mention to me when I signed the lease was that one of this lady's teenage foster kids sexually assaulted a nine-year-old-girl who lived on this street. This is a culdesac and all the original neighbors had moved out before I moved in and it was a brand new community (this was told to me by the one original neighbor on the cul-de-sac who I trust). I'm serious.

These neighbors have been a thorn in my side since I moved in. Not really something I can't put up with, just a slow, burning irritation. They are nasty. They have loads of people in their large two story house (mine is a small one story). When their garage is half-way open and it is often, you can see nasty couches and things, greasy garage floor. Sometimes, the boys/men of the family will be hanging out in front of said garage late at night, smoking cigarettes. They look just like thugs. Baggy pants, the whole bit. Not long after I moved in, the 12 year old kid with challenges (goes to a special school) came in and stole my sons' playstation. I went next door to their house and confronted the mother (I knew it was the son). While I was there, the son put the playstation in a plastic bag and left it outside the garage where we found it. I was minutes from calling the police.

That was the only one of two incidents with these people, but when I come home, I don't feel good seeing them and their dirty garage next to me. She has a grown son that is unemployed and tries to hit on me frequently (asking me out to dinner).

I got in an argument with the lady once and when I told her how NONE of the neighbors want her family here, she said, "I'm not going anywhere".

This has been over an almost 3 year period and I avoid these people like the plague. More things: They have/had mice in their garage (nasty) that migrated over to my garage and now I'm scared to/don't go in my garage. Can't afford an exterminator (should have called the owner, I know). This place is overrun with ants too. I went outside my house and one time, they were coming from the neighbors house in a straight line from her garage to mine. There is always trash over next to her house where she keeps her trash cans. The above argument I had with her was about the trash, because twice they have thrown it over the fence and next to my house. I went over and told her to pick it up and she denied it was their trash. It was.

Well, guess what. Last week, the unemployed grown son's daughters (one who tries to get a date with me) threw one of their nasty stained blankets over the fence and onto my side of the house. I told them to come pick it up and they did. I did not confront this woman this time, but I resent her and her family and I resent being her neighbor.

The owner of this house knew of this woman's foster kid raping that little girl. I just know that based on conversations with two original neighbors.

If the above isn't enough, if I stay I will have to pay $500 dollars above my rent to catch up on for when I didn't pay rent and I cannot afford that. I will be scraping and struggling. There is a nice community of brand new apts that look like condos in a good area (the school aren't good, so I would put in a transfer)) that would allow me to save money for a house and get out of this mess. I'm thinking that maybe I should go. Or I could look for a reasonable house to rent as well.

Submitted by marion on October 27, 2007 - 3:15pm.

Soon I will post the deed of trust (gotta find it) where both the owner and wife have signed giving the second mortgage holder (mother) the right to collect their rents under the "assignment of rents". Still like one of you mentioned on here, I was not privy to or a part of that signing, so that would question if I legally have to send the rent to the second mortgage holder.

The "mortgagee in possession" (second mortgage holder and mother) is trying to get me to agree to and acknowledge the "assignment of rent" and sign on the dotted line. I will NOT do it. She also wants a copy of my rental agreement with what I'm paying for rent. I'm not sure if she knows I'm now on a month-to-month and not in a lease. The sons says do not tell her or send her anything and he now wants a copy of the last documents she sent me which includes some info on "rent skimming". Should I turn this packet over to him? The owner and his wife and I had all been on friendly terms before this happened as he and his wife are Christian like I am.

All this may be a moot point anyway, because I think I may have to head for the door.

P.S. Raybyrnes, I have already applied for the deferrment on my student loans. Great call.

Submitted by ucodegen on October 27, 2007 - 3:49pm.

I'm already in the middle of it.

You are if you let yourself be put in the middle.

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.

This call crosses legal boundaries and can be considered harassment. In addition, if I were the mom, I would be careful of using the term 'gave'.

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.

Irrelevant on not being on speaking terms. This is getting into the middle. Your dealings with either need to be kept at the professional and legal level. They are both trying to draw you in.

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?

Irrelevant. The NOD does not transfer ownership it is only the first step. Don't put any weight on promises. For all you know, they are both in it together.

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.

And she waited close to 6 months to do anything? She is an enabler. Your contract is with the son. Don't get in between them. Once the mother(second lien) forecloses, it will be with the mother. Don't shortcut. If you start paying the mother, you can be evicted by the son because until the transfer, he is the owner.

I didn't mention that the house I'm in is next to some horrible neighbors. The lady takes in foster kids. What the owner did NOT mention to me when I signed the lease was that one of this lady's teenage foster kids sexually assaulted a nine-year-old-girl who lived on this street.

Good enough reason to move.. should have done it sooner. So you want your son to learn from this deviant who is your neighbor?

There is a nice community of brand new apts that look like condos in a good area (the school aren't good, so I would put in a transfer)) that would allow me to save money for a house and get out of this mess.

Umm.. what are you waiting for? And the schools where you are (with the likes of that deviant), are good?

Submitted by marion on October 27, 2007 - 4:06pm.

Here is a portion of the "notice of default and election to see under deed of trust". It' s not the document where the owner and is wife signed given the second mortgage holder the right to the assignments of rents, but it's what I was recently sent by the mother along with the packet on rent skimming:

XXXXXX Corp is the duly appointed Trustee, or duly authorized agent for the Beneficiary, or duly designated Agent for Beneficiary under a Deed of Trust dated 12/13/2006, executed by John. A. Doe and Jane. A. Doe, husband and wife as community property with right of survivorship, as trustor, to secure obligations in favor of Jill C.Nameless, and unmarried woman and John A. Nameless, a single man, as joint tenants, as Beneficiary

Recorded on 12/15/06 as instrument XXXX-XXXXXXX of official records in the Office of the Recorder of Riverside County, California, as more fully described on said Deed of Trust, securing the note(s) for the sum of $37,500,000 that the beneficiarly; that a breach of, and default in, the obligations for which said Deed of Trust is security has occured in that the payment has not been make of: THE SUM OF $20,491.38 HERETOFORE ADVANCED BY THE BENEFICIARY IN PAYMENT OF DELINQUENCIES DUE ON A SENIOR DEED OF TRUST. THE MONTHLY INSTALLMENT WHICH BECAME DUE 08/15/2007 AND ALL SUBSEQUENT INSTALLMENTS, TOGETHER WITH LATE CHARGES, ADVANCES TO SENIOR LIENS, INTEREST INSURANCE, TAXES AND DELINQUENT TAXES AND/OR INSURANCE PREMIUMS TO BE ADVANCED BY THE BENEFICIARY AFTER THE RECORDING OF TEH NOTICE OF DEFAULT. AS A CONDITION OF REINSTATEMENT, ALL SENIOR LIENS, PROPERTY TAXES AND FIRE INSURANCE PREMIUMS MUST NOT BE DELINQUENT AND MUST HAVE A CURRENT PAID STATUS.

That by reason thereof, the present beneficiary under such Deed of Trust, has executed and delivered to said Trustee, a written Declaration and Demand for Sale, and has deposited with said duly appointed Trustee, such Deed of Trust and all documents evidencing the obligations secured thereby, and has declared and does hereby declare all sums secured thereby immediately due and payable and has elected and does hereby elect to cause the trust property to be sold to satisfy the obligations secured thereby.

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

Ok, some questions people:

1) How can the owner get out of this when he is struggling to pay the mortgage on this place and has already almost lost it with the senior lien holder. So how can he come up with $20,491 dollars??

2) Will mommy bail him out?

3) It appears that the beneficiarys named above want the property sold (right?)If so, won't my family be out of a house?

The mother called me and told me the poor beneficiary came in (the woman) and started crying on her desk thinking she was going to lose her investment.

Help me further sort this out, please people. I'm hearing from a lot of you that I just need to go!

Submitted by marion on October 27, 2007 - 4:29pm.

"Umm.. what are you waiting for? And the schools where you are (with the likes of that deviant), are good?"

uc, you're right. I was going to move anyway. The schools where I live (Murrieta) are very, very good. The schools where the new condo type apartments are are in the Lake Elsinore school district. NOT good. I can put in a transfer though and may even be able to have them ride the bus because the apartment complex down the street has boundaries within Murrieta school district. If I can get the transfer my kids will be able to walk to the bus stop near the apartment down the street and get on the bus there. I don't want to move in that apartment because it doesn't look as good as the new one.

I can either go this route or try and find a another house. The thing is, my kids and I can problably save more in a nice apartment right now because of the reduced utility bills and I won't have to pay the the increased water bill to water a yard that comes with a house. We have a 3 bedroom now and my kids don't even use the extra bedroom, they both sleep together in one room by choice (more the little one than the 14 year old). But it works because they are both boys. My goal is to buy a house anyway, renting one will always be temporary.

P.S. actually, if those brand new condos in San Diego are as below market as I think they are and I could get one like that now, I'd move my family to San Diego just to get that value as long as it's a good area.

Submitted by kiki on October 27, 2007 - 4:33pm.

being in a bad neigborhood does not justify that you did not pay 2 months of rent so you can not say "and on top of dealing with this neighbors, i have to pay 500". do not mix things as no matter what you had a contract.

if you did not renew the lease you are in the case of anybody that has a month to month, if the landlord decide to terminate you have to go, that simple.

if they are or not in foreclosure, i still do not see the reason why you think you have the right to stop paying rent.

i think you should leave (clearly not a good neighborhood)and if you are an honest be ready to pay what you owe, maybe rent something smaller/cheaper so that you can afford your debts.

Submitted by marion on October 27, 2007 - 4:51pm.

Kiki, they WERE in foreclosure. The senior lien holder was due to foreclose on Oct. 18th. The mother (second mortgage holder) bailed the son out at the last minute. He had been pocketing my rent money and not paying the senior lein holder for months. So, when I found out the house was in default, I stopped paying rent and was preparing to find something else. I did not count on his mother bailing him out.

Are you saying I should have kept paying this man money knowing the house was going to auction 21 days after Oct. 18th??

Submitted by kiki on October 27, 2007 - 5:15pm.

Marion,
i am not familiar with foreclosure process, so i do not what will happen to you as tenant after the house goes on auction. All i see is you have a contract, you did not paid (wrongly advised, which can happen) but you spend they money, and this is what I have issues understanding.

About 2 years ago i had to stay a couple of weeks in a hotel in NY, after 2 months the charges of about $1200 were not charged in the credit card. This was a lot of money for me as it was an emergency trip. Anyway, I called the hotel so they would charge (they said they have it as paid in their system), then I called my credit card company and they said that they have not received the charge request for the hotel so they will not charge me. Well, 13 months later, i got the charge in my credit card. it was a suprised but you know what? i did stayed in the hotel and it was my responsibility. I paid it. that simple.

as i have seen other people on this board, when they found out the house they rent were in foreclosure they put the money in an escrow account. They PAID.

but anyway, it is what it is, you already did not pay and you already spend the money, now what? that is what you should be looking.

I would recommend you to move but i would also recommend you to consider how to pay what you owe, the latter as matter of principle.

Submitted by Raybyrnes on October 27, 2007 - 9:03pm.

As I mentioned in my original post purchaseing a home through the housing commision is a hybrid purchase. These homes, townhomes, condo are not money makers. That is not the intent of the program. The home prices are set by a combination of Median income, Interest rate, and Housing prices. All in all they have an expectation that you should be able to pay 30% of you monthly income based on the Median Imcomes in San Diego. There fore they are locking you into a fixed monthly payment. Lets say the home price is 150K, %rate is 6% monthly payment is now 1500 a month. If the interest rate goes down to 4% the owner can now sel for 160K becasue the monthly payment is still 1500. If the median income goes from 50K in an area to 60 k this means that people can now afford more than 1500 which has the effect of increasing the 150 selling price to lets say 160.

The bottom line is that you are not going to participate in reapid appreciation. When I was in between jobs I targeted La Jolla, Del Mar, and Carmel Valley for properties. They are out there. I had a 2 bed 2 bath Carmel Valley property lined up for 140K. It would have worked out to 1500 a month. Back out the tax deduction and the pay down on the loan and I was looking at 900$. That is a damn good deal. Problen her is that the seller wanted me to pay all the closing costs. I am in sales and I knew where my income would be in a matter of months and with a wife who is close to obtaining her dental licenses here in the US I felt I would ahve an easier time in a few year of just buying a plce and hoping for the best. In any event go through psots for Temecula and the areas you are interested in. The key is getting your name on the lists. This is a very good deal for someone in your situation.

Submitted by marion on October 27, 2007 - 10:32pm.

Raybyrnes, thanks for this information. I don't understand what you mean by this: "In any event go through posts for Temecula and the areas you are interested in."

Is there a housing commission for the Temecula area? I am googling it and can't find anything yet.

Submitted by Raybyrnes on October 27, 2007 - 11:05pm.

There are commission for housing all over the United States. Once you understand that there is a program in San Diego you should understand that there is a program that probably exists in Temecula. I woold google "Temecula Affordable Housing Programs" and start doing my research.

Carlsbad has it's own housing programs and they use an equity share program. WHen Bressi Ranch was built the developer had to set aside a certain amoutn of units as affordable housing units.

Anytime you see a large scale development you need to understand that there are a portion ofr those new units that are goiing to go to a low or moderate income family or the builder is going to have to pay in lieu fees and face challenges gettting their projects approved form city councils.

Here I did the look up for you

Affordable Housing Is Available
The Housing Authority of the County of Riverside is currently taking applications for the Affordable Public Housing Program. Units become vacant at unpredictable times. Register now so that you will have your name on the list when it comes time to draw from the list.

The Affordable Public Housing Program allows you to pay 30 percent of your monthly income for rent. Low-income families that live or work in the County of Riverside are urged to apply now. Elderly and disabled residents are also encouraged to apply.

This is a federally funded program administered by the Housing Authority of the County of Riverside. The Housing Authority has been serving the County for over 50 years.

Who Can Participate in the Affordable Housing Program?
The program is for families whose annual income is classified as “low-income” (below 80 percent of the area median income, see income guideline).

How Does It Work?
When you call an office, request a waiting list registration form. The program has been called “conventional housing” or “public housing” or “HUD affordable housing." The units are owned and managed by the Housing Authority of the County of Riverside. The rent amount paid by the tenant is 30 percent of the family’s adjusted income.

Are There Other Eligibility Requirements?
In addition to income limits, other factors are considered in the application process. One requirement is that eligible family members have legal residency in the United States. Criminal records are reviewed, since violent criminal activity and drug-related criminal activity are disqualifying factors. Credit reports are run, and references are checked to verify rent payment history and the family’s suitability for tenancy.

Families in which the head of household or spouse is elderly, disabled, or working are given preference. All information must be verified prior to being determined eligible.

Where Are the Affordable Units Located?
They are located in various cities throughout Riverside County. Riverside County is divided into East and West areas. The East County area encompasses the Banning-Beaumont area to Blythe. The West County area covers the Moreno Valley area to Corona.

East County Area
City Street
Indio Aladdin St.
Thermal Polk St.
Cathedral City Corregidor St.
Mecca Seventh St.
Desert Hot Springs Don English Wy.
Beaumont East 5th St.
Banning East Williams St.

West County Area
City Street
Rubidoux 34th St.
Rubidoux Fort Dr.
Riverside Jackson St.
Lake Elsinore Broadway St.
Lake Elsinore Fairview St.
Moreno Valley Gloria St.
Moreno Valley Dracaea St.
Moreno Valley Adrienne St.
San Jacinto Idyllwild Dr.
Perris Midway St.

Is There a Long Wait?
The wait for affordable housing assistance can vary from a short wait while your application is being processed to a year or more depending on which location you select and the required unit size. There are some larger units in the East County for which the wait is shorter. The one-bedroom units have a much longer waiting list (whether in the East or West area) because there are few one-bedroom units.

Where Can I Get an Application?
East County (Desert) Area
Indio Office
44-199 Monroe St. Ste. B
Indio, CA 92201
760.863.2828

West County Area Riverside Office
5555 Arlington Ave
Riverside, CA 92504
951.351.0700

You can call, write or request a registration form. You can also register online at www.harivco.org.

What Kind of Rental Units Are Offered in the Affordable Housing Program?
The units are multi-family rental units but are of various kinds. Some are single story row units and others are town-house type units. There are no single-family homes available.

Important Notes
When your name is drawn from the waiting list and you are determined to be eligible, you will be offered a unit. If you turn down the unit that is available, you will be returned to the waiting list and be placed at the bottom of the list. If you turn down a unit a second time, you will be removed from the list and will need to re-register for the program.

Housing Authority of the County of Riverside
5555 Arlington Avenue
Riverside, CA 92504
951.351.0700

44-199 Monroe St. Ste. B
Indio, CA 92201
760.863.2828
www.harivco.org

Submitted by Raybyrnes on October 27, 2007 - 11:11pm.

There is lot's more information at

http://www.rivcoeda.org/Default.aspx?tab...
Additionally if you are a teacher, nurse, social worker, or law enforcement there are other programs that you can look into for assistance.

I have included a sample of one program that you should be familiar with

Mortgage Credit Certificate
Mortgage Credit Certificate (MCC) entitles qualified home buyers to reduce the amount of their federal income tax liability by an amount equal to a portion of the interest paid during the year on a home mortgage. This tax credit allows the buyer to qualify more easily for a loan by increasing the effective income of the buyer. The Riverside County MCC Program provides for a fifteen percent (15%) rate which can be applied to the interest paid on the mortgage loan. The borrower can claim a tax credit equal to 15% of the interest paid during the year. Since the borrowers taxes are being reduced by the amount of the credit, this increases the take-home pay by the amount of the credit. The buyer takes the remaining 85% interest as a deduction. When underwriting the loan, a lender takes this into consideration and the borrower is able to qualify for a larger loan than would otherwise be possible. The following table illustrates how a MCC increases a borrower’s "effective home buying power":

Effective Home Buying Power With and Without an MCC

Without MCC
With MCC

First Mortgage Amount
$300,000
$300,000

Mortgage Interest Rate
7%
7%

Monthly Mortgage (Principal & Interest Only)
$1,996
$1,996

MCC Rate
N/A
15%

Monthly Credit Amount
N/A
$262.25

"Effective" Monthly Mortgage Payment
$1,996
$1,733.75

Annual Income Needed *
$85,542
$74,304

* Annual Income Needed is based on monthly Principal and Interest (P&I) not exceeding 28% of monthly income.

How does a Mortgage Credit Certificate actually work?
Assume the homebuyer bought a home with a mortgage amount of $300,000 with an interest rate of 7% with the monthly mortgage payment of $1,996 as illustrated in the previous page.

(1) The homebuyer would pay a total of $300,000 x 0.07= $21,000 of interest in the first year (Loan amount x interest rate).

(2) Because the homebuyer has a Mortgage Credit Certificate, the homebuyer could receive a federal income tax credit of $3,150 (15% x $21,000). If the homebuyer income tax liability is $3,150 or greater, the homebuyer will receive the full benefit of the MCC tax credit. If the amount of homebuyer tax credit exceeds the amount of his/her tax liability, the unused portion can be carried forward (up to three years) to offset future income tax liability.

(3) The remaining 85% of the mortgage interest or $17,850 ($21,000 less $3,150) qualifies as an itemized income tax deduction.

(4) To receive immediate benefit of the MCC tax credit, the homebuyer would file a revised W-4 withholding from with the homebuyer’s employer to reduce the amount of federal income tax withheld from his/her wages and increase homebuyer’s take home pay by $262 per month ($3,150/12 )

(5) By applying the increase in the homebuyer take home pay of $262 towards his monthly mortgage payment of $1,996, his effective monthly payment becomes $1,734 ($1,996 minus $262).

“Tax Credit” vs. “Tax Deduction”
A “tax credit” entitles a tax payer to subtract the amount of credit from their total federal tax bill whereas a “tax deduction” is subtracted from adjusted gross income before federal income taxes are computed.

What happens if the homebuyer cannot use the entire amount of the MCC credit for the year in which it applies?
If the amount of the MCC exceeds the homebuyer’s tax liability, the unused portion of the credit can be carried forward to the next three years or until used, whichever comes first.

Time Period of the Mortgage Credit Certificate
The MCC is in effect for the life of the loan as long as the home remains the borrower’s principal residence. The MCC is not transferable to a new loan when refinancing, nor can it be assigned or transferred to a new buyer or another home. In addition, the MCC Program includes a nine year recapture provision which provides for a return of tax credits taken if the property ceases to be the borrower’s primary residence within nine years from the close of escrow. The amount of tax recapture is determined by formula, and provided to the borrower at the time the application is taken. After expiration of the nine year period, the borrower may dispense of the property without incurring penalty, but would lose the future benefits of the MCC.

Qualifying for the MCC Program
The three basic qualifications are:

(1) The borrower must be a first time Home Buyer;

(2) The borrowers annual income must fall within the program income limits; and

(3) The home being purchased must fall within the program purchase price limits. If the home is located in a Target Area, then the first-time buyer limitation does not apply and the income and cost limits are higher.

First-time Home Buyer definition
A first time Home Buyer is defined as a person who has not had an ownership interest in his or her principal residence for the previous three (3) years.

Eligible Properties
The residence purchased in conjunction with a MCC must be the borrower’s principal residence and may not be used as a business or vacation home. The home may be a detached or attached single family home, condominium unit, a co-op unit, or a manufactured home on permanent foundation (new or re-sale).

Riverside County’s MCC Allocation
In order to issue MCC's, the County must apply to the California Debt Limit Allocation Committee for an MCC Allocation. The amount that the County received is based on a combination of factors including demonstrated need, past performance and available MCC authority.

Applying for a Mortgage Credit Certificate
Borrowers must apply for a MCC through a Participating Lender. The Participating Lender will perform an initial qualification and assist the borrower in completing the MCC submission forms. The Lender then submits the MCC application to the County. The County reviews the Borrowers qualifications and, if they meet the program guidelines, issues a letter of commitment to the Lender. The Commitment Letter must be issued prior to the close of the loan. The loan must close within 120 days of the commitment. Upon loan closing, the Lender submits the MCC Closing package to the County and the County issues the MCC, with the Lender and borrower each receiving a copy. The borrower may then claim the tax credit on their Federal Income Tax Returns. The borrower can receive the money annually as a tax refund or adjust his or her W-4 withholding form to receive the benefit via an increased pay check.

Loan terms
The loan terms depend on the Lender and type of loan you use. Depending on the mortgage marketplace and the borrower requirements, each Lender can set its own interest rate, length of mortgage term, down payment requirement, fees, points, closing costs and other loan terms. MCC's may be used with conventional, fixed, 15-year, 30-year, or 40-year term loans, including FHA, VA, FNMA, FHLMC and privately insured loans. MCC's may not be used in conjunction with bond backed loans, such as Cal-Vet or California Housing Financing Agency (CalHFA) loans.

Application Fee to receive a MCC
The maximum total fee for a MCC is $400. Of this, the County collects a $300 Non-Refundable application fee which may be paid by any person (buyer, seller, lender, etc.). In addition, Participating Lenders may charge up to $100 for their processing of the MCC. Therefore, the total maximum charge in association with the MCC is $400. This is separate from the other fees associated with purchasing a home, such as escrow fees, loan origination and processing fees and closing costs. Your lender can provide you with a breakdown of the total fees associated with obtaining a mortgage loan.

Copyright 2007 Riverside County EDA , Privacy

Submitted by lindismith on October 28, 2007 - 9:26am.

WTF?????

Am I still on Piggington?

Submitted by kaycee on October 28, 2007 - 10:40am.

Marion,

I hope that info from Raybyrnes helps. You really need to get out of there.

Does the landlord have any money held in escrow? Did you pay him a security deposit and/or last months rent? That may help you if you can't come up with funds and need to pay up to move on. You can say that you intended the escrowed money to be your rent since the house was about to be foreclosed on.

Submitted by marion on October 28, 2007 - 11:50am.

Raybyrnes, thank you for all this great information. It is very, very much appreciated! I had no idea that large developments (you mentioned bressi ranch) had to set aside low income units. That would mean that I could get a really nice house below market. I wonder if that angers the neighbors knowing that a borrower got the same house for much less money??

Kaycee, the owners have a $1200 security deposit from me. In case anyone's wondering, as far as my neighbors go, the foster teen who sexually assaulted the little girl has since moved on, therefore my sons aren't in any real danger. But, still, I hate looking at those people when I arrive home. They seriously bring the neighborhood down.

I just ran the numbers. I know I promised the owner, but with my current financial situation the way it is (new grad), I CANNOT pay him the extra $500 for the next five months. That would put my monthly rent at $1900. I can't do it right now.

Submitted by marion on October 28, 2007 - 12:05pm.

I'm curious. I posted documents for you guys to read. Do any of you think the owner can get out of this and keep the house?

Submitted by marion on November 3, 2007 - 11:16am.

Does anyone think this my owner can block his mother from foreclosing? He is supposedly getting an attorny and claiming she owes him money. The amount in default is on the second mortgage is 11k and change.

Submitted by patientlywaiting on November 3, 2007 - 11:42am.

Interesting to see $11,000 forever ruin a mother-son relationship.

Think of all the realtors who sold houses to friends and family in the last few years.

Submitted by marion on November 3, 2007 - 12:18pm.

Yes, it's sad...

Again, this woman called almost in tears one night (if that wasn't an act...) about how the investors were coming in her office crying on her desk.

Anyway, the harassment by her continues. I got another packet in the mail 2 days ago in which she was pointing out that it's illegal for me to participate in the son's "rent skimming" behavior. The bottom line is my future is unsure here, because if the mother gets the property I don't know if she will continue to rent to me when/if she finds out I didn't pay rent for 2 months and still owe that amount of money. So, if she gets the property, she can evict. The clock is ticking. The notice of default became effect in September.

I cannot pay the son the extra $500 on top of the regular rent in catch-up payments. So, in order to protect me from him evicting, I'd need some type of agreement in writing from him that he will let me pay arrearages when I am able. I don't think he will want to do that. He offered me a new lease, but do I really want to be pinned down to this place for any significant length of time? No, I do not.

Finally, the tenants next door to me make sick every time I think and or look at them.

Bottomline: My future is not secure here until I know the outcome of who wins: mother or son. Even then, the son cannot really afford this place, so he could sell anytime. He may take a loss just to get out now before prices drop anymore even though he tells me he will hold on to the property.

Submitted by barnaby33 on November 3, 2007 - 3:54pm.

Can they evict me?

They can and should. Just because the owner is having trouble making his payments and has a financial legal issue with his mother doesn't alleviate you of your legal obligation to pay rent. Thats a pathetic opportunistic sort of behavior. If you have concerns about who to pay the rent to, put the money in an escrow account and tell both parties you'll pay when you find out clearly to whom you would owe the rent. It sounds like without a foreclosure, you still owe your landlord, not his mother.

Josh

Submitted by marion on November 3, 2007 - 8:23pm.

Josh, the owner is engaging in "rent skimming". That's illegal. I'm paying rent to ensure I have a place to live. So, why should I pay him if he's not paying the lender?

I'm aware I can get evicted and don't want to stay anyway. Because of the instability of my future in this property (as a direct result of his problems with his mother). Also because his mother has been rude to me and she appears manipulative. If her company (second mortgage holder) forecloses on this property, I have a gut feeling that she will evict me anyway.

As previously noted, the mother is still demanding money and has the gall to send me a letter stating her company's not a property management company and will NOT do any repairs while the home is going through foreclosure.

I understand that you probably own rental property like most on here do so are probably empathetic towards the owner. But, put yourself in my position. I am concerned about my immediate future in this rental. This is not about taking advtantage of the owner.

It's about me and my family's well-being. I have kids to think about and if I have to move they will be abruptly uprooted. How would you like that to happen to your family, Josh?

Submitted by Raybyrnes on November 3, 2007 - 9:48pm.

Legality is determined by a judge not you. Your obligation is to pay your rent to the son. End of story. This crap about the neighbors you don't like, a mother who contacts you is rubbish. All you need to say to stay clean is that you make on time payments to the son and that you will need to contact him regarding any further issues. If they need to contact you on any further issues you would prefer they do it through an attorney.

Submitted by SD Realtor on November 3, 2007 - 10:08pm.

I guess I just do not understand the entire issue. I mean I am so far away from understanding the mentality that I guess I am missing the point. I have gone round and round with OC Scam on this issue many moons ago....

Why is there a sense of entitlement that people about not needing to pay rent if the landlord is in trouble with the lender?

What if the landlord got into financial ruin because of a bad investment? What if he lost everything due to a lawsuit? What if he lost everything due to credit card debt? I really believe that an agreement between a tenant and a landlord is a total orthoganol event to anything else.

If you do not want to pay rent then do not pay rent. Why should it matter if the landlord is going to lose the house or not. What argument is there to pay rent at all even if the landlord is making his mortgage payments? If the end goal is to be a squatter in the home to eventually own it then say so. That is okay by me. I mean I don't agree with it but at least it makes some sense to me.

Anyways like I said, I guess I just don't understand the mindset.

Am I missing something here?

SD Realtor

Submitted by The OC Scam on November 3, 2007 - 10:12pm.

CONTACT A LAWYER!! By the way rent skimming only works when the home was purchased within 12 months from you signing the lease agreement. You have been there for more than 2 years so rent skimming doen't apply to you! The son deserves to be paid even if his house is going into foreclosure and you can not only get evicted but they could file a judement against you which could really screw up your credit and ability to purchase a home in the future.
Also these low income programs usally require you to have 12 months solid rent payment history which you have just messed up you may want to have another talk with the landlord ASAP.

Submitted by The OC Scam on November 3, 2007 - 10:23pm.

By the way yes I have run this issue before with SD realtor ( which gets my respect on the issue) and this time I agree with the logic that if this has been a 3 year deal and all of sudden the guy has gotten into a mess then the renter needs to either move on or pay up! And yes there is a huge difference if Marion wants to get a deal on the house but I can say from experience is not a easy journey! My situation was very different the owner had 7 homes at 100% loans and purchased in August 2006 I signed the lease in Nov 2006. The owner told me to stay as long as we could and she letting the house go. We continued to deposit the funds every month in an escrow account and when the home was purchase back by the bank we sign a month to month rental agreement on another home down the street as a back up plan while we work on our purchase offer. Not to mention I was advised by my lawyer through the entire process.

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