Is this legal for a homeowner to do? (Tampa: foreclosures, mortgage)

[algia]

Well yeah, since they are not making payments, but do they know they still charge rent? If I was a bank, I don't think I'd like that considering they have an obligation to me first!?

I mean, really, there should be a law prohibiting people from doing this!

Originally Posted by GoRays813

Trust me, their bank already knows that they're not being paid. It's not fraud. Their interaction with the bank is a separate interest from the interaction with the tenant.

[DUNNDFRNT]

Originally Posted by algia

I think they are committing fraud to their bank!

Can you report these people to their bank?

While I agree is unethical. Lets agree that some people cant afford their mortgage, that's a fact, hence the housing crisis, so now you have a house you cant get rid of, and you cant afford. Your credit is already going to get ruined, the bank is free to take the house but they wont, if you rented it out notifying the tenants this is the deal, and you are getting a break in the rent because of it. Its a gray area but the alternative is letting the house sit there with no electricity,and just rotting away. I don't know, am not saying that I would do it, but am not in a situation when am already tight on money and here is a way to make some extra money.

[d4g4m]

Many people, thinking they were investors, bought homes in 05, 06, 07 with the intention of renting them. All of then are now under water and many of them have decided to no longer make their mortgage payment. That problem is between the purchaser and the bank. Resolving it can take two years.
But meanwhile, the tenant signed a lease obligating them to make a monthly rent payment. If the tenant fails to pay, the owner can get them evicted in a short time. The owner can rent the dwelling to another unsuspecting tenant that the mortgage is not being paid, that there are foreclosure proceedings and the property may soon be owned by the bank. Then you have to deal with the bank evicting you because they want an unoccupied home for sale.

[algia]

I get that.

But that doesn't give you the right to lie.

It is bad karma...if you will. IF you decide to stop making your payments in the middle of the lease then notify the renter, and lower or stop collecting rent so they can move on. They don't have a right to spend my money because they made a mistake, and purchased at the peak! How is that the renters fault?

Originally Posted by DUNNDFRNT

While I agree is unethical. Lets agree that some people cant afford their mortgage, that's a fact, hence the housing crisis, so now you have a house you cant get rid of, and you cant afford. Your credit is already going to get ruined, the bank is free to take the house but they wont, if you rented it out notifying the tenants this is the deal, and you are getting a break in the rent because of it. Its a gray area but the alternative is letting the house sit there with no electricity,and just rotting away. I don't know, am not saying that I would do it, but am not in a situation when am already tight on money and here is a way to make some extra money.

This is THEFT to me:

The owner can rent the dwelling to another unsuspecting tenant that the mortgage is not being paid, that there are foreclosure proceedings and the property may soon be owned by the bank.

[gulfer]

It is THEFT.

My situation was rediculous. The owners of my house were using my rent money to finance a home they bought on the NORTH SHORE OF HAWAII!!!! They weren't paying the mortgage on the home we were living in, but they bought that!!

That home has sinced foreclosed and will never sell for what they were asking. It was a MANSION! They wanted 390K for the house and the average price in the area was 150K-170K. Was a nice area, but Mississippi doesn't support pay enough overall to support that kind of home.

I THINK THE OWNERS SHOULD BE IN JAIL - But others are right, different obligations and agreements. Yes, the bank knew they were not paying. We got stickers and door hangers all the time.

Sure doesn't make it one bit right!!

[tilli]

Originally Posted by algia

I get that.

But that doesn't give you the right to lie.

It is bad karma...if you will. IF you decide to stop making your payments in the middle of the lease then notify the renter, and lower or stop collecting rent so they can move on. They don't have a right to spend my money because they made a mistake, and purchased at the peak! How is that the renters fault?



This is THEFT to me:

Once you fork over your contractually required monthly payment, it is no longer your money, it becomes THEIR money. If they spend it on hookers and blow instead of making their mortgage payment, that is between them and their mortgage holder and has nothing to do with you. You can't dictate how your landlord chooses to spend their money. You are obligated to pay as agreed even if they have decided to default. If they want to ruin their credit, that is their business, not yours. Your business is to fulfill the terms of your lease as required. Even if they are foreclosed, you are covered by the Protecting Tenants at Foreclosure Act of 2009. This requires the bank to honor your lease for its full term (except in the rare circumstance where the foreclosure date precedes the lease date). If you are month to month they have to give you at least 90 days notice before requiring you to move out - that is longer than the notice required for our state. There is an exception if the buyer intends to use the property as their residence, but then they still have to give you 90 days.

Renters in Foreclosure: What Are Their Rights? | Nolo.com

That said, I agree that it is a wholly unethical practice to take a loan and agree to pay it back, but then decide not to, not because they are unable, but because they are unwilling. Their credit scores will reflect their lack of creditworthiness for a long time.

Choose your landlord wisely.

[rezfreak]

That's pretty much my friend's situation - her landlord lives in London and isnt paying the mortgage.

She was thinking about skipping the last month rent since she knows she wont get her security deposit back if the landlord cant even afford the mortgage. I'm not so sure about that though.

[MortonR]

Originally Posted by rezfreak

That's pretty much my friend's situation - her landlord lives in London and isnt paying the mortgage.

She was thinking about skipping the last month rent since she knows she wont get her security deposit back if the landlord cant even afford the mortgage. I'm not so sure about that though.

While I am not suggesting that she do so, Florida tenant law is such that it will be well beyond a month before the landlord could even begin to initiate legal proceedings against the renter, so if she did bail on the last month's rent, it's unlikely they would be able to evict her before the end of the lease.

Of course, a lease is a legally binding agreement, so they have plenty of other means to recover their rent if they choose to do so. Being that they are an absentee landlord and overseas to boot, I find it difficult to believe they would take the time to pursue her, especially if they are in arrears on the mortgage in the first place....

RM

[Stewabby]

We actually got lucky. A few years ago when we were renting in Riverview the homeowner was foreclosed on. We actually got almost all of our security deposit back even though they obviously hadn't paid their mortgage in months.

You can be sued if you don't pay rent, even if they don't pay their mortgage.

[rezfreak]

Originally Posted by MortonR

While I am not suggesting that she do so, Florida tenant law is such that it will be well beyond a month before the landlord could even begin to initiate legal proceedings against the renter, so if she did bail on the last month's rent, it's unlikely they would be able to evict her before the end of the lease.

Of course, a lease is a legally binding agreement, so they have plenty of other means to recover their rent if they choose to do so. Being that they are an absentee landlord and overseas to boot, I find it difficult to believe they would take the time to pursue her, especially if they are in arrears on the mortgage in the first place....

RM

Well that's kinda what i told her too. Although, if they dont return the security deposit, wouldnt that legally cover the last months rent? (the deposit is the same as 1 months rent)