Hello again, Dear Reader;Now this Bloomberg article reports an interesting tenant removal tactic practiced by the leading foreclosing banks:
Banks are breaking local rental laws in evicting hapless tenants from foreclosed homes in their feverish rush to take possession of the property. Now this is a lose/lose scenario for sure: Here we have occupants actually WILLING AND ABLE TO PAY THE RENT TO LIVE IN THE HOME, many with a long record of prompt rental payments, and the banks want them to move out instead of taking their offered rent money, leaving the homes vacant, without a cash flow and open to vandalism and vagrancy.
Why? The banks claim they are "not equipped" to "deal with" tenants. They want the empty homes but not people who want to occupy them and pay? They rather just sell the homes sixty cents on the dollar than deal with live and breathing people in the foreclosed homes. This sorry lack of basic "infrastructure" deprives the home of its highest and best use, the tenants of their legally leased and paid for domicile, and crashes the value of the real estate in a distress sale. Brilliant. I am at least glad to see that not all lenders have this fire sale mentality going on. At least Fannie an Freddie Mac do not treat their tenants as shabbily with their REO, apparently JP Morgan Chase, Bank of America and Wells Fargo are some of the ones that do.
And turning off the utilities and padlocking the home? Were a regular landlord to do this, boy would they find themselves in a court of law in a hurry, and properly fined to boot! Being a property manager and priding myself on running a clean shop just makes me shake my head at these illegal activities.
Really, what good does it do a poor tenant to even know that the law is on her side and she can stay in the home for the allotted thirty to sixty days -- depending on that state's laws -- when her house is locked, the utilities are turned off, and there is a Sheriff at the door telling her to get her stuff out NOW? Scary, heavy handed tactics, and illegal to boot. Are we back in the Robber Baron days where people are chased off by force, not law? Apparently....yes.
Harsh times do not need to be exacerbated by harsher illegal tactics. Good tenant deserve to have their rights respected, even if it takes a reasonable amount of time to deal with the toxic fall-out of a foreclosure. Beyond the basics: Would it not make sense to let the good tenants stay in possession? Give them a new lease and collect the rent? They are actually paying to live in the home, and such cash flow could positively impact the alligator aspects of a foreclosed home. Not to mention having someone in the home who is willing to take care of it and not leaving it vacant, vandalized and open for squatters.
I see the blind windows of many empty homes as I drive through my town, some broken, some boarded up. Every street has at least a couple. Some are so empty that I do not run into a soul for a whole block. Destroyed habitats of humanity. These used to be $300,000-and-above priced homes just a couple years ago. Trashed, vacant, creepy. ..... Cheap.
This methodology goes along with the lock-step mentality of a bank that kicks the owner out of the home because he cannot pay a $400,000 mortgage instead of refinancing him at actual property value. and then puts the home on the market for $150,000 for anyone else to buy.
Anyone but the owner gets the new deal. Nice.
Good property management preserves the value of the home asset, protects the owners from loss and unnecessary expense, abides by the established laws of the land that govern legal conduct of all parties involved and stabilizes a neighborhood by proper stewardship of resources. How can a bank say they are "not equipped" to deal with this? What they are apparently not equipped to do is to follow the local tenant laws or treat people decently.
This NEUTRON BOMB approach to real estate asset liquidation is the most toxic and wasteful property management style imaginable: "Save the real estate and make the people disappear" -- and we are giving these institutions HOW MANY TRILLIONS to de-populate our communities?
Why? So they can turn our neighborhoods into ghost towns?
How do you feel about that?
Here's Charlo Patterson, LCAM, CRM, M.Ed, from Florida,
Feeling the Fall-out of the Bank's Asset Liquidation Neutron Bomb Strategy
No comments:
Post a Comment