We had someone on our forum who posted something a little different for most requests for information, I found it unpleasant enough I thought I’d share it with others. Bolded sections are from the original post.

I have a home, in NY, in the foreclosure process. A tenant is renting out the home. The auction is scheduled for this monday. A rep from Fannie Mae Bank visited the tenant today and alledgedly told him the bank has recently taken title and he must leave. I advised him not to leave unless he has an eviction notice from the sheriff to vacate premises.

So far, not too much out of the ordinary, person owns a home as a landlord with a tenant in the property and there is going to be a foreclosure auction on Monday 11/16/09. A rep from Fannie Mae visits the property and tell the tenant the lender has taken title and the tenant must leave. It’s not unusual for a lender representative to visit the property even before the transfer of title to ensure the property is secure and it isn’t being laid to waste. The issue about who actually holds title is pretty much third hand information, it’s likely title will not actually transfer until sometime shortly after the auction.

My goals:
- I at least want the tenant to be able to stay at the house through the holidays
- I would like to see the bank pay the tenant cash, I’ve heard $2500 has been given from the bank to the tenant to vacate premises. (Unfortunately, the bank may have paid my former tenant who left in Sept 2009, I have no way of knowing if this occurred)

First sentence seems admirable, the owner doesn’t want to inconvenience the tenant through the holidays. Next sentence is where things start to get a little frayed around the edges. Mr. Landlord wants the tenant to receive some “cash for keys” money which is common enough when a lender would prefer a clean vacant property rather than evicting. But wait, what’s that about “I’ve heard $2500 has been given from the bank to the tenant to vacate premises”? What tenant? It appears the lender may have paid $2,500 to the tenant who left in September, 2009. This is November, 2009, foreclosure auction is scheduled for November 16, 2009 and Mr. Landlord put a new tenant in the property sometime in the last month and a half? Mr. Landlord also wants the tenant to be able to stay through the holidays?

What can I do to help keep the tenant on the premises as long as possible?

The forum always gets posts about tenants who have this sort of thing happen to them, property owners rent the property out knowing it’s headed to foreclosure and it’s probably a fairly safe guess the rent isn’t being applied to the loan in foreclosure. Needless to say, the information was not provided to Mr. Landlord on how to extend a tenant’s stay and we can sympathize with the tenant’s plight. Hopefully they’ll get enough time out of the property to recover some of their move-in costs. What amazes me is the wanton disregard for the tenant’s time and trouble in not only moving into the property, but having to move back out after the bank forecloses.

We’ve written about individual homeowners being a little less than forthcoming in their loan applications and written various posts about different kinds of frauds. This takes the cake:
from Mortgage Fraud Blog:

According to court testimony, Sabine State Bank provided a line of credit to First Fidelity Mortgage, monies that were in turn used by First Fidelity to fund mortgages for its customers. This line of credit at Sabine State Bank was secured by the customer notes pledged by First Fidelity.

As previously reported on Mortgage Fraud Blog, Nichols devised a scheme by which he prepared fraudulent notes by forging signatures of borrowers and notaries public, and would then deliver them to Sabine State Bank as collateral in order to cause the bank to deposit more money into First Fidelity Mortgage’s account. When the bank would deposit funds into the account to fund these loans, Nichols just kept the money for himself. In total, Nichols defrauded the bank out of $2.9 million.

Forging signatures of borrowers and notaries? While others have certainly done larger scale frauds, this is probably the boldest one I’ve read about, and one with a very limited time frame until discovery.

Have you experienced a foreclosure within the past 2 years? I am a psychology researcher doing a short internet survey (less than 20 minutes) and I would appreciate if you could help me by filling it out. The survey is about your experience and thoughts about your foreclosure. Participation is completely voluntary and you can stop at any time. As well, your participation is anonymous and you will never be asked to provide your name or any other identifying information. Please note that you must be over 18 to participate in this survey. The survey has been reviewed by the University of California Institutional Review Board.

If you would like to participate, please click here or go to the following link:

http://www.surveymonkey.com

Thank you for your help – your responses can help us to better understand how people cope with the difficulties of foreclosure.

Kate Sweeny, PhD
Department of Psychology
University of California, Riverside

For those who follow the progress of the Home Affordable Modification Program, or HAMP, it is possible to use unemployment insurance payments to qualify for a loan modification. Good Idea? It will certainly allow some borrowers to complete a modification and perhaps to keep up with that modification until those unemployment payments run out. The optimistic will say it’s likely the borrower just needs a little time to find a job, then they’ll have regular income to replace the unemployment. The realistic will counter that many people who have recently lost work aren’t likely to find employment in the industries where they once worked.
Anyone who worked in the construction trades or in any real estate segment probably isn’t going to see new jobs opening up anytime soon. The same holds true with manufacturing, information and professional and business services.

Sept. 09 Unemployment Rates in selected sectors from BLS
17.1% Construction
11.9% Manufacturing
11.2% Information
11.3% Professional and business services
11.1% Agriculture and related private wage and salary workers

I don’t see it as anything more than “kick the can”, with the hope the can gets kicked far enough the real estate market will begin to recover before too many modifications fall apart.