Living in Limbo: Tenants Feeling the Mortgage Mess

Saturday, August 2, 2008
Leslie Albrecht
Merced Sun Star

Brandy Menina's apartment hasn't had hot water for six weeks.

When
she and her three teenage daughters want to bathe and wash their long
hair, she fills up four pots and two roasting pans with water and heats
them on the stove.

Sounds like the kind of problem she should
complain to her landlord about. But Menina doesn't enjoy a typical
landlord-tenant situation. The apartment building she lives in is in
foreclosure.

Now a bank owns it, and it's hired a real estate
company to sell the building. They want her out so they can sell it.
Menina says she'll leave when she can -- legally, she's entitled to
stay for at least another month.

In the meantime, she's waging a battle to get her hot water turned back on.

With
Merced facing an unprecedented wave of foreclosures, renters like
Menina are emerging as the collateral damage of the crisis. Often their
landlords don't tell them their building is in foreclosure. They're
blindsided when a real estate agent knocks on the door and tells them
it's time to get out.

That's what happened to Menina, and she knows she's not the only
one. But the difference between Menina and all those other people is
that Menina isn't going quietly.

"I'm just tired of being run
over, so I decided to make a stand," she said. "I'm not saying I
shouldn't have to leave, but we should have some rights. While we're
still here, we should at least have hot water and sanitary conditions.
I just feel like they're using their status to push the little guys
around."

Luckily for Menina, the city's Code Enforcement
Department agrees with part of that statement. Last Monday, it ordered
Century 21 M&M and Associates, the real estate company selling the
building, to get Menina's hot water turned on again, or get dinged with
a building code violation.

Century 21 M&M manager Larry Matos
says handling properties occupied by renters presents a tough situation
for Realtors. His company's goal is to sell the property -- not play
landlord.

When a property does need repairs, Realtors don't
always have the authority to do the work, said Matos -- they need
permission from the bank that owns it.

Getting that
authorization usually requires communication with massive banks based
in other parts of the country, which can take several weeks, he added.
That's why Menina hasn't had hot water for so long, said Matos.

A
bank won't sell a building until it's emptied of tenants, which means
real estate companies are under pressure to get renters out. To speed
the process, Realtors sometimes offer tenants "cash for keys," a
lump-sum payment to leave the residence quickly. That money can also
guarantee that tenants don't trash the place on their way out the door,
saving real estate agents more headaches down the road.

But
tenants should realize that they don't have to leave the minute a real
estate agent knocks on the door and says so, said housing lawyer
Suzanne Swenk of Central California Legal Services. Renters can stay
put for two months after the house they're renting completes the
foreclosure process. That happens when the property is sold to a bank
or other buyer at a public auction. However, after that 60-day grace
period, the new owner will start eviction proceedings.

But
Realtors trying to empty the property aren't likely to tell tenants
exactly how long they're legally allowed to stay, she noted. Swenk says
tenants should educate themselves about their rights to avoid being
pushed around.

That's what Menina did, and her efforts paid
off. She visited Central California Legal Services after she couldn't
get a response from Century 21 on her hot-water repair request. They
put her in touch with the city's Code Enforcement Department. On her
quest for help, she also complained to local and state elected
officials, the state Department of Real Estate and the Public Utilities
Commission.

She said she's hoping that bringing attention to her
story will remind the banks and real estate companies that sometimes
people live in the building they're trying to sell. "The people who
rent, we're the little guy with no say," said Menina. "We can't afford
a lawyer. Everybody's at a loss. We're poor people, and they're running
all over us."

Housing lawyer Swenk says she's seeing more and more renters caught in Menina's situation.

"It's
getting worse all the time -- there are more foreclosures, and we're
continuing to have this problem," said Swenk. "We're talking lives
here, families. I know there's an old saying that banks aren't in the
rental business, but like it or not, they're the new owners."

Reporter Leslie Albrecht can be reached at (209) 385-2484 or lalbrecht@mercedsun-star.com.

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