Foreclosured
mikealrogers.com
mikealrogers.com
[Edit: Sorry if I sound snippy. There are currently six /r/politics stories on the front page. Politics with a hashtag is still politics. There are numerous other places on the Internet you can discuss politics with semi-informed people who are intelligent; there is only one HN. Take this discussion elsewhere, please.]
To be honest, you can leave your content-free political jabs and meta-comment meandering off of HN as well. The aricle isn't rambling and incoherent. It's one tech founder's story of how his startup is being jolted by issues with housing - a major problem across America.
I hate to say it, but no matter where you stand on the issue, the Occupy protests are too big to ignore. Hundreds of people will likely see the occupysf protests when they come to Startupschool this weekend. The issues they raise have major implications on business owners. You can't just sweep it under he rug with a "its not tech" statement and an ad hominem attack. We are supposed to be better then that.
Besides, I'd rather see blog posts from real founders than see bullshit HTML 5 demos anyday.
I suspect a lot of this stuff (and lets be honest, the quality of HN posts has been a bit down lately) is from reddit refugees.
Basically the opposite of this: http://news.ycombinator.com/noobstories
It usually takes 9-12 months for the a house to go from first missed payment to going into foreclosure, to being sold to another owner. Things like the Notice of Default get posted on the actual property, so I wonder how the renter and/or the landlord could have missed this.
The other part that I don't get is that if this home really is in such a nice neighborhood, why would the landlord give it up without lawyering up himself? If I had put equity into a house and owned it, and it somehow got foreclosed on, I would be mad as hell, and I would lawyer up to get my house back. "Brokenhearted" wouldn't be how to describe me, it would more likely be "spitting bullets."
So it sounds like the landlord was collecting rent from the renters for a while, and not giving them a head's up that this foreclosure was going to happen. That's pretty freaking shady if you ask me.
It's a messed up situation. A mod to reduce the mortgage amount in line with market value might have been better for everybody. But another wrinkle is the bank might have sold the mortgage and just be servicing it on behalf of bondholders, and there's no way to get all the bondholders to agree to start doing mods. And it's a bad precedent to do mods every time the borrower thinks he's underwater, even if he has the ability to pay.
Even if the bank still owned the mortgage, they are not well equipped to deal with situations like these. They're not professional property managers who can take over the property and deal with a renter. It's also a PR nightmare if they foreclose and then try to kick someone out so they can sell it at full value. So they end up selling it at a lowball price to someone who is willing to do the dirty work.
I think the writer might be confused about TARP. Mostly TARP was buying stock in the banks, most of which was paid back. There were some programs to buy and guarantee assets. I guess if TARP had somehow bought that mortgage it could apply. Not saying TARP was a great idea or not, just that it wasn't a blank check for banks to no longer care if they got value from the property.
The latest administration proposal is to let mortgage owners refinance no questions asked, even if they're underwater, if they've been paying on time. That seems like a good idea.
http://www.calculatedriskblog.com/2011/10/few-comments-on-ha...
Neither are most rental property owners. I think you'll find most landlords who have many tenants either engage the services of a property management company, or end up effectively building one themselves.
I think the major banks could dedicated a few of their middle managers and staff attorneys to finding and contracting with some reputable management companies for a while.
I don't. Not for an instant. The landlord's story is the same story as thousands of other homeowners, right down to BofA "losing" paperwork repeatedly.
I guess this is easy to miss if your only news source is HN and other tech-focused sites, but for anyone that has paid any attention to the mortgage crisis, you'd see this repeated again and again and again.
It's not like the banks deny it, either. Sometimes they get called on a particular case by the press, and their response is one of the generic cop-outs -- "we're investigating", or "we can't discuss specifics due to privacy laws", or "ongoing litigation".
http://abcnews.go.com/GMA/bank-america-apologized-accidental...
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Most of the cases I read about begin either before the owner falls behind, or shortly after the first missed payment. They try to work with the bank on a loan modification, sometimes under the federal program that some qualify for, but paperwork just keeps getting "lost" -- sometimes they claim to have never received it, other times they freely admit that they "lost" it themselves.
Edit: I'm not speaking generically here about all foreclosure cases. I'm speaking strictly about cases where loan modifications were sought, and the owners weren't turned down, and followed the bank's instructions, but one day the bank just decided to start the foreclosure process, and after that it was robo-bank time, nothing could be done.
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He absolutely should have told the tenant what was going on sooner, but I have no reason to doubt, and plenty of reason to believe, that the landlord was trying to fix it and wasn't expecting an immediate foreclosure when it happened.
But I still don't believe that the reaction of the landlord makes sense to me, unless the author was missing some key facts.
The article says that not only was he renting the house for several years, but the landlord also raised his family in it. So, depending on how long the landlord owned it, there must be considerable equity built up in the house. To let something like this slip away without fighting it would be ridiculous. If the account of the author is accurate, then it sounds like the landlord walked away from the place. It just doesn't make sense that he would be apologetic to the renters, but instead he should be steaming mad, and would be trying to protect his investment. If this were me, and I just lost a house that I put a few 100k into it, and I had good renters, I would tell my renters "Don't move anywhere, I'll handle everything." But it sounds like he hung he renters out to dry.
Remember, in order to get a loan mod (which the landlord claims he was in the midst of), the landlord at some point must have stopped paying his mortgage, so he definitely was collecting rent without paying the mortgage. Landlords letting their rental units slip into foreclosure, which collecting rent is even more common than banks screwing up and accidentally foreclosing on homes, so to me this is the more likely scenario.
$100 visit to the lawyer was helpful - 90 day notice they stuck on my door wasn't legal (basically from a typo) so my lawyer got them to give me another notice, which meant I was able to live there rent free for about 5 months. I also got $5000 in a cash for keys deal - basically they just wanted to guarantee I wouldn't trash the place (which of course I wasn't going to, but they didn't know that).
But without knowing my rights I would have not known about the incorrect 90 day notice and I also wouldn't have knowns to get a cash for keys deal.
Y'all can criticize a blogpost for not being concise. And that makes sense. But just thought I'd voice that it's not just about concrete information transfer from a marginal utility standpoint. Sometimes it's just interesting to read what other bright developers are thinking (even it's sort of loose thoughts).
I like owning my house. One bonus is I can't be evicted if the landlord gets foreclosed on.
Make sure the local government knows that your taxes are up to date.
Make sure you follow the rules in your neighborhood covenants.
Make sure you know when the neighborhood council have charged you for a remedy that they took upon themselves, make sure you pay that, and make sure you see the levy notice if you don't pay it.
Make sure ...
> "The latest hot restaurant [in Oakland] only serves Mac & Cheese and beer in mason jars and is 2 parts hipster and 3 parts toddler."
Who'd want to buy a house
1st, the 90 days required is not true in all states. I know for a fact it isn't true in Florida: http://rhol.org/csu/evictions/Florida/FloridaSteps.htm
2nd, the author never said what the "market value" was. I imagine it was more than the investor paid, or he/she wouldn't have bought it. Doing so would be a bad investment by definition.
3rd, The author doesn't understand basic real estate finance. You put money down with the assumption you will pay your mortgage, if you do not pay your mortgage the bank has to foreclose out of their shareholder's interest (if you have a 401K you probably own part of a bank).
4th Foreclosure law in most states says that if you loose a property to a bank, all leases and contracts are void, even those contracts with tenants. (Florida has recently put some restrictions on this type of action and I would be surprised if California hadn't followed or led the same type of action.)
There is no federal law requiring 90 days notice to vacate premise. Just individual state laws which is my point.
"The federal law requires these tenants to keep paying rent for as long as they occupy the property, which can be 90 days from the sale or the remainder of their old lease, whichever period is longer."
Also in the sidebar:
"Notice to vacate: Federal law requires new owners to give tenants at least 90 days' notice before seeking to evict them. State law requires 60 days' notice."
Edit: Link to actual text of law: http://thomas.loc.gov/home/gpoxmlc111/s896_enr.xml#toc-id9BE...
http://www.pbs.org/wnet/need-to-know/economy/the-true-cost-o...