Deadbeat Landlords

[AmazedRenter]

I found out last Saturday that my landlord has been cashing my rent checks, but not paying the bank: I received a fancy Notice of Default on my door. Not a surprise at all, btw, as my landlord has been subsidizing my residence to the tune of $1200 a month (mortgage - rent), and he works in construction.

I called my landlord, who now says he has been trying a short sale. My landlord is ~24 and owns 5+ houses, most of which are apparently in default. I then called our friends at IndyMac who made this winner loan. IndyMac indicated that the entire process would likely take 4-5 months, buying me some time. Funny detail was that the IndyMac guy spoke to me as if he handles these calls all the time. Good news for me, as I'd hate to be pushed into buying too early. My wife is tired of renting at this point (renting since 2005, when we moved here), plus we have two young kids.....

I'd be interested to learn if there are any others in the same situation.

[Tejas]

Look on the bright side! Potentially 6 months of rent paid to savings instead of your landlord will make a nice addition to your downpayment if you do buy after this.

[deejayoh]

[Lake Hills Renter]

I wouldn't be surprised if I end up in a similar situation. My landlord is in a world of financial hurt right now -- he worked at WaMu (now at JPM, but reduced salary), and he has a house in Texas he was trying to flip and got caught not only in the upside down market, but by Hurricane Rita. I got a UPS "legal express" envelope for him at the house last week and feared it was a foreclosure notice of some kind. Fortunately, it turned out to be something else. But I still half way expect a foreclosure on the house I'm renting at some point. I've thought about just moving ahead of the disaster, but the deal he's given me is just too good. I'll probably ride it as long as I can.

[mukoh]

[Grubbie]

I was in the same boat back in January (and made a post asking for help). My landlord was seems similar, owned 5-6 rental properties. The house I was living in they had owned for 25-30yrs, refinanced multiple times until they refinanced right around the peak with IndyMac. They rent was 1/2 the mortgage. They are trying to shortsell it for 160k less than what what they offered the place to met at.

It sucks when it happens as you gotta move out and it is a big pain. Live deejayohsaid, do NOT stop paying rent. Although they aren't paying the mortgage, they can still evict you if you stop paying (since they still own it). Once it goes to auction, you will have 20days from the auction date to move out. I hope you are month to month or are coming up on the end of the lease. Remember you rights with them trying to sell the house as well as having them wanting to show the place is a pain, especially when they are required to give you notice (in seattle it is 2days I believe) before entering but will sometimes want to know if they can squeeze in an appointment the next day or schedule a bunch on the weekend.

Hopefully you can find a new place which is better and cheaper to rent. I was a little unlucky as there wasn't a ton of places for rent in the area/price range I was looking for back in Jan/Feb.

The timeline at my place was
Jan 6th Notice of Default
Feb 6th Notice of Trustee Sale
May 8 or 18th is the Auction date

[AmazedRenter]

Thanks all for the input, especially Grubbie's input on the timeline was most useful. I likely have until July to find a place I like.

I'll keep you posted of our further adventures .

[Angie]

[tomtom]

While poking through Public Records, I found an 'investor' who has recently defaulted on at least 12 properties in King County. A number of these had been advertised as rentals.

[rose-colored-coolaid]

I would try to negotiate out of paying the landlord anymore if you can. Not sure how reasonable he is, but you might be able to make an agreement where if you take care of the place for him, that everyone comes out of the situation cleaner. Some banks are paying people to leave without destroying the place. Maybe you could get him to agree to accept whatever they might offer in lieu of your own payment to him.

Regardless of what you do, get everything in writing.