Housing for the Homeless, Inc. (in organization)

The other day, I responded to a comment on Twitter from a knowledgeable mortgage financing friend regarding the current housing situation vis a vis foreclosures. His view is that the "market should find its own level" ; that the Federal Government should not interfere with modification programs, the EHLP program etc.

After some thought, I must agree with him. If the pace of foreclosures returns to normal (once the robo-whatever is done and docs are corrected) and evictions follow promptly, there will be plenty of Housing For The Homeless. There will be no need to build new shelters. Mortgagees can just allow cities to house "The Homeless" in these abandoned/emptied OREO properties. The cities would pay but only by not taxing the mortgagee/foreclosing entity. If the mortgagee does not incur this liability by recording a deed, then more properties will be formally owned by the entity which won the foreclosure sale bid.

Now, one might ask,"Why should the homeless get to live in someone else's house when the someone else just got evicted and became HOMELESS?" Answer: "Well, that's the market finding its level!!!". Further, the new homeless family can move into another "victim's" house as he/they get thrown out! See, that way no one can complain - except "The Investors".

This is the shadowy group (Goldman, Lehman, Bear Stearns, Countrywide, JPMorgan et al) which created the securitizations of the mortgages, and sold and/or bought (and hedged) the resulting "bonds". They are the folks who took a mortgage, put it together with 3000 others, released all of the originating banks/mortgage companies from all liability, and sold pieces of the pool of mortgages as "Mortgage-Backed Security" shares/participations.

A solution to the matter of getting the investors paid during the OREO stage, would be to have the "Newly Homeless" receive a minimum wage pay (because they are out of work which is why they lost the house to start with) to remove all of the black mold that develops in uninhabited housing. To be fair, some of it isn't Black Mold of the bad kind but just regular garden variety MOLD.

So we have the solution:
1. Increase the pace of foreclosures to create Housing for the Homeless
2. Hire the homeless, now in a home, to remove mold
3. This helps the national unemployment problem so there should be some federal money for job creation, which can be paid to the investors as rent from the Homeless
4. The homeless move in, shopping carts, kids and all, and the streets look better, so new companies will move into the formerly empty urban areas because the former homeless have homes and a paycheck
5. The suits against the foreclosing mortgagees should slow, because, the family which just got evicted can move into another family's newly vacant home AND get paid.

The market will find its level. Hopefully it will be above the water table.

Author's Copyright by Richard I. Isacoff, Esq, July, 2011

rii@isacofflaw.com
http://www.isacofflaw.com

Tenants Protected After Foreclosure

You are a tenant in a multi-family or single family house that has just gone through foreclosure. Can you be just "kicked-out" by the foreclosing bank? The answer used to be "yes" (after Court) but now, in Massachusetts, it is "NO"!

The new Neighborhood Stabilization Act, in addition to protecting homeowners against "quick" foreclosures, protects Tenants who are living in houses that have gone through foreclosure and been sold or taken back by the lender. ( THE LAW IS MASSACHUSETTS GENERAL LAWS CHAPTER 186A)

The law states that the owner through the foreclosure SHALL NOT EVICT A TENANT EXCEPT FOR "JUST CAUSE", unless there is a sale to a bona fide third party (and there are rules about that case detailed below)

"Just Cause" is defined as follows:

1. Tenant has failed to pay the rent payments in effect before the foreclosure (or a use and occupancy charge) PROVIDED the foreclosing owner has notified the Tenant in writing of the amount of the rent and when and where it is to be paid

2. Tenant has violated an obligation of the tenancy/rental agreement (example: keeping a dog when no pets are permitted)

3. Tenant is committing a nuisance and interfering with other Tenants' rights (example: making excessive noise at 3 am)

4. Tenant is using or allowing others to use the unit for illegal purposes (example: selling drugs)

5. Tenant with a written rental agreement or lease that has expired has refused to sign an extension with similar terms as the original lease/rental agreement

6.Tenant has refused the new owner access to the unit even after proper notice to the Tenant that the new owner wishes to inspect the unit

EVEN FOR JUST CAUSE The law now requires that the owner through the foreclosure post a notice in a prominent place in the building (a place that all tenants will see) stating the names, addresses, telephone numbers and contact information for the foreclosing owner, and the building manager or representative, and stating the address to where the rent or occupancy charges must be sent.

THEN the foreclosing owner cannot evict for the following actions that are just cause until 30 days after the above notice has been posted and delivered to the tenants.

If the new/foreclosing owner disagrees with the amount or rent being charged he/she can bring an action in District/Superior/Housing Court and claim that the amount is unreasonable and ask the Court to set a new rate. HOWEVER, if there is a pre-exisiting written lease or rental agreement with the prior owner, the one who was foreclosed on, the amount or rent SHALL BE DEEMED TO BE REASONABLE.

THERE ARE TEETH IN THE LAW: If a foreclosing owner evicts a tenant in violation of the law, the foreclosing owner/new landlord shall be punished by a fine OF NOT LESS THAN $5,000.

Tenants now have the right to stay in their home despite a foreclsoure PROVIDED they

1. Pay the rent

2. Follow the rules

3. Don't do anything illegal in the unit

The only exception is that if the property is sold to a true third-party unrelated buyer - then the normal rules regarding evictions (Summary Process) apply.

This is great news and strong protection for tenants in houses that have gone through foreclosure. CAUTION: Tenants who do not follow the rules have little chance of surviving the eviction process.

The law is brand new. There have been very few cases dealing with it so do not be surprised if the bank that takes back a house is unaware of the law and its details.

As a Tenant you now have real rights. Follow the rules and be happy. Ignore them and be evicted.

Author's Copyright by Richard I. Isacoff, Esq

rii@isacofflaw.com

http://www.isacofflaw.com/