February 26, 2010 at 9:38 am and is filed under Home Loans Articles. Tagged: Hardship , Letter , Modification. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
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How to Write a Loan Modification Hardship Letter
The difficulties in outreach to tenants comes as the government continues expanding options and assistance to borrowers and renters dealing with foreclosure. In addition to the new federal law, the Treasury Department plans soon to rollout its plan encouraging more short sales by offering financial incentives to lenders and borrowers. Currently, the lease would dissolve at the time of foreclosure and the renter would lose their home. Agents who perform BPOs have an inherent conflict of interest, because they are working for lenders who want to quickly dispose of properties. Speculators and other investors scoop them up at the fire sale prices, dragging down property values overall.
The current struggle to win justice for the residents at some apartments has broader implications for the overall campaign to win a general moratorium on foreclosures, evictions and utility shutoffs in the state of Michigan. As the economy further declines more people will face illegal lockouts and displacements. There were only few incidences when the landlord was honest enough with the renters, notifying them about the foreclosure situation months in advance.
Many are being joined by scores of renters who discover, often with no warning, that their rented house or apartment is now owned by a bank, which wants them out in a matter of days. For most of these renters, their options are bleak. It simply means that now is the time to buy all of the Michigan foreclosure properties that you can through Short Sales, rent them out and flip them later. Or re-finance in the near future and pull out the massive amount of equity that you have in the property. That’s often the first indication of trouble for renters. Some also encourage tenants to open mail that comes addressed to “occupant,” since sometimes foreclosure notices will be mailed that way.
Douglass Diggs, a city planning director, said they are encouraging tenants to try lease-to-own or rent-to-own contracts so that they could capitalize on low home prices partly caused by Michigan’s high foreclosures by state. Tenants in common arrangement is not much different from joint ownership or partnership. However, there is some subtle form of difference between the two. Damages may include moving expenses, new apartment application fees and deposits, and the difference between new rent and the old rent, if any.
Some people a rental agreement to a “month to month” rental, designating a lease for a longer rental terms. To avoid permanent damage on a renter’s record, the renter can have an order of eviction vacated in court. In the past year apartment owners have found an automatic increase in demand for rented accommodation because of the foreclosure crisis. Another reason is that after suffering the foreclosure marauding, few people can afford to buy houses; they have no option but to move into rented lodgings.
If the landlord fails to disclose and the tenant has to move as a result, the tenant can recover twice his actual damages and all prepaid rent. This legislation will require that in the event of foreclosure, existing leases for renters are honored, except in the case of month-to-month leases or owner occupant foreclosing. If so, a minimum of 90 days notice will be required. Sadly, the most vulnerable, yet forgotten victims of today’s foreclosure crisis, have been the young dependent children of low-income renters who end up facing homelessness along with their parents. Consequently, parents have been forced to entrust their children with relatives or close friends in order to save them from the experience of homelessness.
In Michigan 28% of the foreclosed houses were not lived in by the owners but had been rented out. In California of all the properties foreclosed, 22% of the units were not occupied by the landlords. The current listings of bank foreclosed homes in Denver show prices of homes ranging from $65,000 to $308,000. One of the reasons why home buyers prefer Denver to be their residence is because of wide opportunities. It’s an extreme example of misplaced punishment: the landlord doesn’t pay the mortgage, and the person who’s renting pays the price. Unfortunately, renters are often the last to know that their landlord has fallen behind on his payments.
