Renters In Foreclosure

When your landlord falls behind on their mortgage payment, the bank can take back the home. This process is called foreclosure.

If you are renting a home that has fallen into foreclosure, Federal, State and some city laws will at least temporarily keep you in your home.

If you live in the City of Los Angeles, renters in good standing cannot be evicted because of a foreclosure. (See details below.)

If you live anywhere else in California, renters get until the end of their lease, or at least 90 days, to move out in a foreclosure.

CALIFORNIA RENTERS (outside of the City of Los Angeles)

How long can I stay?

According to U.S. law, which went into effect in May 2009:

If you have a written lease with your landlord, you cannot be evicted until the end of your lease.

If you do not have a lease, you must receive at least 90 days notice before you have to leave the property.

What notice will I get?

According to California law, your landlord does not have to tell you the home you are renting is in foreclosure. But before the home is sold, a “Notice of Sale” must be posted at the home along with some information about your right to continue to live in the property.

Once the home is sold, the new owner (bank or third party) must attach a cover sheet to the notice of termination of tenancy providing information about your rights to stay in the property.

Who do I pay rent to?

Until the home is sold, you must continue to pay your monthly rent to your landlord. You owe rent to the new owner once the home is sold.

If the new owner wants you to move out, they must give you a 90-day written notice. If you don’t move out within 90 days, they can begin the eviction process. The new owner cannot cut off your utilities, change the locks or make other efforts to throw you out.

What is “Cash for Keys?”

In most cases, the new owner is the bank or lender that foreclosed on the property. They may offer you money to move out sooner than 90 days. This is called “Cash for Keys.” If you agree to this make sure the person has authority to make the offer and gives you the offer in writing. Not all tenants will receive a cash-for-keys offer.

What about my security deposit?

Your landlord must return your security deposit minus any lawful deductions, or transfer it to the new owner. If not, both the old and new owner is liable.

What if I’m on Section 8?

The new U.S. law giving renters 90 days notice also applies to Section 8 tenants. Other special rules apply if you receive Section 8. Contact your case worker or local Section 8 office immediately. Tell them about the foreclosure and discuss the terms of your contract.

What if my city has rent control?

Some cities with rent control do not allow a new owner to evict you because of a foreclosure. Contact your local rent control office for more information:

Santa Monica: (310) 458-8751

West Hollywood (323) 848-6450

Beverly Hills (310) 285-1031

CITY OF LOS ANGELES RENTERS

Starting in December 2008, a renter in the City of Los Angeles cannot be evicted simply because of a foreclosure.

Los Angeles has rent control, which protects some but not all renters. Rent control laws require landlords to have one of 12 specific reasons to evict a tenant. A foreclosure is not one of those reasons.

This protection against foreclosures now applies to all renters in the City of Los Angeles.

If the bank or lender which takes over a property in a foreclosure tries to evict a renter, call Los Angeles’ rent control hotline at (866) 557-7368 or (213) 808-8888.

If you receive an Unlawful Detainer, immediately contact a lawyer or a legal aid agency.

If you get notice of a foreclosure sale from a financial institution, contact that business to find out how and where to send your rent.

Watch out for scams!

After someone buys the property at a public auction, other people may try to collect rent from you. Don’t give money to anyone unless they can prove they now own the property.

The “Deed Upon Sale” will tell you who the new owner is. You can get a copy by visiting the Los Angeles County Registrar Recorder’s office at: 12400 Imperial Hwy, Norwalk, CA 90650.

Bank Owned | Reduced $499,000

mark spector  mark spector realtor  mark spector realtorThis charming San Pedro home is located on a quiet street, just minutes to the beach. With 3 spacious bedrooms and 4 bathrooms (tax records indicate 3 bathrooms, buyer to verify) at over 2800 square feet, there is plenty of room for you and your family! TWO master bedrooms, two charming balconies, laundry room, wet bar, office, large family room with cozy fireplace, formal dining room, and open bright kitchen….this list of incredible features goes on and on! Needs some TLC so bring your tool belt and turn this property into your ocean-side dream home!

Real Estate Investment Trusts (REITs)

A real estate investment trust (“REIT”), generally, is a company that owns – and typically operates – income-producing real estate or real estate-related assets. REITs provide a way for individual investors to earn a share of the income produced through commercial real estate ownership – without actually having to go out and buy commercial real estate. The income-producing real estate assets owned by a REIT may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans.

Most REITs specialize in a single type of real estate – for example, apartment communities. There are retail REITs, office REITs, residential REITs, healthcare REITs, and industrial REITs, to name a few. What distinguishes REITs from other real estate companies is that a REIT must acquire and develop its real estate properties primarily to operate them as part of its own investment portfolio, as opposed to reselling those properties after they have been developed.

To qualify as a REIT, a company must have the bulk of its assets and income connected to real estate investment and must distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends. In addition to paying out at least 90 percent of its taxable income annually in the form of shareholder dividends, a REIT must:

Be an entity that would be taxable as a corporation but for its REIT status;

Be managed by a board of directors or trustees;

Have shares that are fully transferable;

Have a minimum of 100 shareholders after its first year as a REIT;

Have no more than 50 percent of its shares held by five or fewer individuals during the last half of the taxable year;

Invest at least 75 percent of its total assets in real estate assets and cash;

Derive at least 75 percent of its gross income from real estate related sources, including rents from real property and interest on mortgages financing real property;

Derive at least 95 percent of its gross income from such real estate sources and dividends or interest from any source; and

Have no more than 25 percent of its assets consist of non-qualifying securities or stock in taxable REIT subsidiaries.

REITs generally fall into three categories: equity REITs, mortgage REITs, and hybrid REITs. Most REITs are equity REITs. Equity REITs typically own and operate income-producing real estate. Mortgage REITs, on the other hand, provide money to real estate owners and operators either directly in the form of mortgages or other types of real estate loans, or indirectly through the acquisition of mortgage-backed securities. Mortgage REITs tend to be more leveraged (that is, they use a lot of borrowed capital) than equity REITs. In addition, many mortgage REITs manage their interest rate and credit risks through the use of derivatives and other hedging techniques. You should understand the risks of these strategies before deciding to invest in these types of REITs. Hybrid REITs generally are companies that use the investment strategies of both equity REITs and mortgage REITs.

Many REITs (whether equity or mortgage) are registered with the SEC and are publicly traded on a stock exchange. These are known as publicly traded REITs. In addition, there are REITs that are registered with the SEC, but are not publicly traded. These are known as non-traded REITs (also known as non-exchange traded REITs). You should understand the risks of the different types of REITs and their strategies before deciding to invest in them.

As with any investment, you should take into account your own financial situation, consult your financial adviser, and perform thorough research before making any investment decisions concerning REITs. You can review a REIT’s disclosure filings, including annual and quarterly reports and any offering prospectus at sec.gov. You can invest in a publicly traded REIT, which is listed on a major stock exchange, by purchasing shares through a broker (as you would other publicly traded securities). Generally, you can purchase the common stock, preferred stock, or debt securities of a publicly traded REIT. You can purchase shares of a non-traded REIT through a broker that has been engaged to participate in the non-traded REIT’s offering. You can also purchase shares in a REIT mutual fund (either an index fund or actively managed fund) or REIT exchange-traded fund.

Tips for Avoiding Foreclosure

Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender asking you to contact them?

Don’t ignore the letters from your lender

Contact your lender immediately

Contact a HUD-approved housing counseling agency

Toll FREE (800) 569-4287

TTY (800) 877-8339

If you are unable to make your mortgage payment:

1. Don’t ignore the problem.

The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem.

Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.

The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notices of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights.

Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

5. Understand foreclosure prevention options.

Valuable information about foreclosure prevention (also called loss mitigation) options can be found online.

6. Contact a HUD-approved housing counselor.

The U.S. Department of Housing and Urban Development (HUD) funds free or very low-cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender, if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.

7. Prioritize your spending.

After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses–cable TV, memberships, entertainment–that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your mortgage.

8. Use your assets.

Do you have assets–a second car, jewelry, a whole life insurance policy–that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies.

You don’t need to pay fees for foreclosure prevention help–use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payment) for information and services your lender or a HUD-approved housing counselor will provide free if you contact them.

10. Don’t lose your house to foreclosure recovery scams!

If any firm claims they can stop your foreclosure immediately and if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional or a HUD-approved housing counselor.

 

Loan Modification Frequently Asked Questions

A Loan Modification is a permanent change in one or more of the terms of a Borrower’s loan, allows the loan to be reinstated, and results in a payment the Borrower can afford.

Question 1: In utilizing the Loan Modification Option to bring an asset current, can the Lender include all fees and corporate advances?

Answer: Mortgagee Letter 2008-21 states in part: Legal fees and related foreclosure costs for work actually completed and applicable to the current default episode may be capitalized into the modified Principal Balance.

Question 2: May a Lender perform an interior inspection of the property if they have concerns about property condition?

Answer: Yes, per Mortgagee Letter 2000-05, page 20, the Lender may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact the Borrower’s continued ability to support the modified mortgage payment.

Question 3: Can a Lender include late charges in the Loan Modification?

Answer: Mortgagee Letter 2008-21 states that the goal in providing the Borrower a Loan Modification is to bring the delinquent mortgage current and give the Borrower a new start; therefore, the Lender should waive all accrued late fees.

Question 4: When utilizing a Loan Modification Option, can a Lender capitalize an escrow advance for Homeowner’s Association fees?

Answer: HUD Handbook 4330.1 REV-5 (Paragraph 2-1, Section B, Escrow Obligations) states: Lenders must also escrow funds for those items which, if not paid, would create liens on the property positioned ahead of the FHA-insured mortgage.

Question 5: Is there a new basis interest rate which Lenders may assess when completing a Loan Modification?

Answer: Yes, Mortgagee Letter 2009-35 states that the Lender shall reduce the Loan Modification note rate to the Current Market Rate. Please refer to Mortgagee Letter 2009-35 for more details.

Question 6: Are Lenders required to re-amortize the total amount due over 360 month period?

Answer: Yes, per Mortgagee Letter 2009-35, the Lender must re-amortize the total unpaid amount due over a 360 month period from the due date of the first installment required under the Modified Mortgage.

Question 7: What date is utilized when determining the correct interest rate for a Loan Modification?

Answer: The date the Lender approves the Loan Modification (all verification completed and servicing notes documented, reported to SFDMS) is the date that Lenders are to use in determining the interest rate.

Question 8: Will HUD subordinate a Partial Claim should a Borrower subsequently default and qualify for a Loan Modification?

Answer: If a Borrower subsequently defaults and qualifies for a Loan Modification, HUD will subordinate the Partial Claim.

Question 9: Are Lenders required to perform an escrow analysis when completing a Loan Modification?

Answer: Yes, Lenders are to perform a retroactive escrow analysis at the time the Loan Modification to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized.

Question 10: Can a Lender qualify an asset for the Loan Modification Option when the Borrower is unemployed, the spouse is employed, but the spouse name is not on the mortgage?

Answer: Based upon this scenario, the Lender should conduct a financial review of the household income and expenses to determine if surplus income is sufficient to meet the new Modified Mortgage Payment, but insufficient to pay back the arrearage. Once this process has been completed the Lender should then consult with their legal counsel to determine if the asset is eligible for a Loan Modification since the spouse is not on the original mortgage.

San Pedro’s Downtown Harbor Water Cut Is Starting

San Pedro WatercutConstruction of the Downtown Harbor Water Cut is scheduled for mid-January 2012 and as of January 8, 2012 the parking lot between Fire Station 112 and the Maritime Museum will no longer be available.  The Harbor Department will be posting signs in the parking lot the week of January 2nd to inform the public.
The lot across the street from Acapulco restaurant will be available for visitor parking and directional signs will be installed.
A ground breaking ceremony is scheduled for Wednesday, January 11, 2012 at 10:00AM.

Essential Tips For The First Time Home Buyer

When you are buying your first home, expect to feel a mix of emotions. You will feel excited, confused, elated, and stressed. Sometimes these emotions will come all at once, and at other times they will be spread throughout your home buying experience. Buying your first home is so emotional because it is so important. This is very likely one of the most important buying decisions you will ever make, and it shouldn’t be taken lightly. In this article, we will discuss some first time home buyer tips that everyone should explore.

First and foremost, understand that you need to hire a Realtor. A Realtor is your personal expert in the home buying field. They can provide you with valuable information, indispensable resources, and time saving efforts. If you try to buy alone, especially as a first time buyer, you will very likely make some huge mistakes. Prevent these mistakes by hiring a great Realtor. It will save you time, money, and prevent needless anxiety.

A second step in the buying process is having a clear cut understanding of what you can afford. This will help you to narrow down the selection of homes you will be looking at, and keep your budget in check too. Take some time to sit down and look at what you can afford. Be realistic when setting your price, and evaluate your decisions with your spouse or significant other. You will thank yourself when you find a house that you can truly afford.

After you have a budget in mind, it’s time to get pre-approved. The pre-approval process involves visiting a lender and seeing if you can qualify for the amount you think you would like to spend. This will help you to know that you can afford the home of your dreams when you do find it. A pre-approval letter is also a valuable tool that can serve you well when it comes to making an offer.

Now that you have your Realtor hired, and your pre-approval is under wraps, it’s time to visit houses. Visit LOTS of houses! You want to see as many properties as you can in order to determine which one is really best for you. Even if you fall in love with the first house you see, take some time to look at a few others. This can help you to accurately gauge how your beloved house really stacks up against the competition.

After you have found the home of your dreams, remember the importance of an inspection. An inspection can help you to find problems that may not be seen by the naked eye. Finding these problems before you buy the home can save you from unexpected costs after a purchase is made. Find a quality inspector and be present on the day of inspection, if at all possible. Make sure to fully read the inspection report that you are given and discuss any concerns with your Realtor. You might be able to get the seller to make important repairs before the sale is complete.

Your first home buying experience is a mixed bag of emotions, and an exciting time in your life. Taking some time to make the right decisions before purchasing your home can make this experience that much better for everyone involved. In this article, we have provided some important tips that can help any first time buyer. We hope you will take our advice to heart, and we wish you the best of luck in your home buying experience.

Sink Hole San Pedro

Mark Spector Real Estate InvestingWill Paeso delMar ever be the same? From these recent pictures I don’t think so? What have you heard? The Daily Breeze stated that local business like the Corner Store and the new Ace Hardware are feeling the effects.

 

 

 

Mark Spector Real Estate Investing     Mark Spector Real Estate Investor     Mark Spector Real Estate Investing

San Pedro | Paseo del Mar Landslide In The News

From the Palisades Residents Association :

Here are highlights from two articles in the news. Click on the links to read the full articles.
From the LA Times: Work Crews Hustle as San Pedro bluff slides slowly into the sea
The highway and sidewalk have sunk more than a foot, opening deep crevices in the asphalt that cut a jagged diagonal line across the two-lane roadway. A wooden fence that once ran a straight line along the road now bends abruptly toward the ocean, a change that happened in just days
In the last week, the movement has accelerated to about half an inch per day.
No buildings are at risk of falling into the ocean.
Officials don’t know how much farther the ground is going to shift, but they are bracing for the possibility that chunks of the bluff could shear off and slide toward the sea.
Contractors are working seven days a week, 10 hours a day, manning loaders and excavators that are carving new trenches to reroute two major storm drain pipes away from the moving earth. The project could take four more weeks, but the hope is to finish before any heavy rains.
In the Daily Breeze: Crews begin relocating power poles in sinkhole area to White Point
The work to relocate the [power] poles is expected to take two to three weeks.
The move is designed to maintain electrical reliability as well as to ensure continuous operation of a county sewage pump station at Paseo del Mar and Western Avenue.

Utility Poles In White Point Nature Preserve | San Pedro

Paseo del Mar Mark SpectorInstallation of utility poles inside the White Point Nature Preserve began today. L.A. Department of Water & Power (LADWP) crews started this morning and have been instructed to try and keep the noise level down as much as possible.
The plan is to get all the poles installed on/near the northern footpath first so the K-rail will be removed to gain access. After that is done, the crews will be moving the poles that are lying on the ground into the Nature Preserve. Installing these poles should take 4 to 7 days of work. After this is complete, the LADWP will focus on the utility poles going by the Nature Preserve building.

If you are thinking of buying or selling a home, condo or investment property call me Mark Spector 310-430-0633