Tenant Toolkit: Foreclosure

If you think the housing crisis of the past few years only affected homeowners, think again! As a renter, you didn't do anything to cause the mortgage meltdown that’s been ravaging the housing market, but that doesn’t mean that you're immune its effects. When your landlord defaults on their mortgage, it can leave you in an extremely vulnerable position. That’s why we’ve put together some essential resources to help you know where you stand and what you can do.

First off, it’s important to understand exactly what’s going on. If the property you’re renting has been foreclosed on, that means your landlord has failed to make their own payments on the home, putting his or her ownership status in jeopardy. A bank may step in and become the new owner of your rental, or the property may be put up for auction. In any case, that leaves you answering--and paying rent--to a new landlord, who may or may not have new designs that on the space that don’t include you as a tenant.

So where do you from there? Here are some links to keep handy in your tenant toolkit.

Frequently Asked Questions
If you’re renting a property that goes into foreclosure, it’s easy to feel like you’re in limbo. Get oriented with this brief FAQ and get some answers to basic questions before you start digging into nitty gritty details.

Foreclosure Laws
Did you know there are laws in place to help tenants in your situation? Banks, agents or other bad actors may try to misinform you in an effort to get you out of the residence. Knowledge of your rights is an indispensable weapon in your arsenal, so make sure you’re versed in foreclosure laws!

Foreclosure Action Guide
Our foreclosure action guide is a step-by-step plan that will lead you through the process of finding out your home’s foreclosure status and asserting your rights as best as possible. We also give detailed information about the best ways of dealing with your new landlord, bringing the actions of bad actors like banks and real estate agents to light, and organizing with other people in your community to protect the rights of other tenants in foreclosure situations.

Dealing with Realtors
New owners of foreclosed properties can be unscrupulous in their attempts to evict you. They may try to convince you that you don’t have rights, offer you deals to get you out quickly or even intimidate through letters, phone calls, or by showing up at odd hours. Don’t let them harass you out of your home. Fight back by learning how to best disarm their attempts.

Public Letter to Bank to Fight Eviction
It’s important for tenants to assert their rights as publicly as possible and in writing. This template gives you a good starting point for reaching out to banks and letting them know your intent to remain a renter. Official letters also signal that you’re serious about your rights and aren’t afraid to fight back!

Contact our Hotline
Finally, don’t forget our Foreclosure Hotline, which you can call at  1-888-495-8020. If you prefer, you can also fill out an online intake form and have a counselor call you back. Every foreclosure situation is unique, so don’t be afraid to speak directly with one of our volunteer counselors. They’re trained to help you asses your situation and strategize how to fight back and defend your rights.

Attorney General Kamala D. Harris Announces $1 Million Grant to Benefit California Homeowners & Tenants

Attorney General Kamala D. Harris last week announced a $1 million California Homeowner Bill of Rights implementation grant to The National Housing Law Project.

“Californians were hit hard by the mortgage crisis and many people are still struggling to stay in their homes,” Attorney General Harris said. “The California Homeowner Bill of Rights gives borrowers more opportunities to stay in their homes, and this grant will help make sure the law is applied across the state and that everyone gets the protection they are entitled to.”

The California Homeowner Bill of Rights (HBOR) is a set of landmark laws that extend key mortgage and foreclosure protections to California homeowners and borrowers. The laws, which took effect at the beginning of this year, restrict dual-track foreclosures, guarantee struggling homeowners a reliable point of contact at their lender, impose civil penalties on fraudulently signed mortgage documents and require loan servicers to document their right to foreclose.

This grant will maximize consumer benefits from the HBOR, while minimizing abuses of the law by providing training to California consumer and housing attorneys from both private and non-profit firms.

The National Housing Law Project will partner with Western Center on Law and Poverty, National Consumer Law Center and Tenants Together to implement this grant.

The National Housing Law Project and its partners will use the grant to:

• Provide high-quality, on-site trainings and webinars to consumer and housing attorneys on how to maximize the HBOR’s protections.
• Train more than 800 lawyers.
• Provide support in cases that raise important legal issues or have potential for broad impact.
• Create a library of litigation materials to help attorneys maximize the HBOR’s benefits.
• Produce a report that analyzes the HBOR’s statewide impact and identifies compliance problems.

Funds provided through this grant were secured by Attorney General Harris through the $18 billion National Mortgage Settlement.

Established in 1968, The National Housing Law Project seeks to advance housing justice by advocating for affordable housing, litigating to uphold homeowners’ and tenants’ rights and offering technical assistance to legal aid attorneys who work with low-income families.

The State Bar has partnered with the Attorney General’s Office to administer the grant and monitor compliance. The National Housing Law Project will provide quarterly financial and program reports to the State Bar and the Attorney General’s Office.

See our tenant rights counselors in action

Our new cohort of volunteer counselors, who went through an initial training in January, brushed up on their skills together last Friday afternoon. Central to the training was reviewing the basic rights for tenants in foreclosure situations and getting clarity on what can often be a confusing, inhumane situation caused by banks, investment companies, and their real estate representatives. Photos from the day:

Group shot of everyone in the office Friday 3/22

Gold team takes a stab at the tenant foreclosure rights and process flow chart.

Blue team puts forth their best effort.

Counselors in attendance and their supervisor, Aimee.

Our counselors come from all walks of life, including students at local law schools, tenant rights activists, recently graduated public interest lawyers, and retired advocates for justice. With their passion and commitment, it's possible for us to help thousands of tenants across the state understand and assert their rights each year.

We work to help tenants demand necessary repairs, get their security deposit back, and fight back against unfair evictions, harassment, discrimination, and retaliation. If you are a California tenant, call us at 888-495-8020 to reach a counselor.

Hotline Happy Endings...

Since 2009, Tenants Together has helped over 7,500 tenants in foreclosure situations know and assert their rights. Recently, we have had more and more calls from tenants in Fannie Mae-owned properties getting the runaround. Real estate agents representing Fannie Mae regularly give tenants invalid or confusing notices to quit, pressure tenants to accept cash-for-keys deals, and refuse to give tenants proof of ownership. Tenants who have been dutifully paying their rent have to deal with their whole lives being turned upside-down. This is fundamentally unfair, and through our hotline we help empower tenants to demand better outcomes for them and their families. 

Wendy—Sonoma County: 

Wendy first called our Tenant Foreclosure Hotline in the Fall of 2011 because she discovered her landlord was in default. We advised her on her general rights and what to expect if her rental went into foreclosure. After foreclosure Wendy dealt with a Fannie Mae representative who misled Wendy on their stated policy to continue to rent to tenants. In the Fall of 2012, Fannie Mae issued her an eviction notice. With help from our counselors, she was able to negotiate a cash-for-keys agreement that was on her terms. Wendy said, “I have been relying on Tenants Together for advice as a tenant who was facing foreclosure… Every single person that I spoke with offered helpful information… I simply could not have survived and triumphed without your guidance.” 

Tony—Fresno County: 

Tony called our hotline because he was given a 30, 60, or 90 day notice to move out by a real estate agent representing Fannie Mae (with this kind of confusing notice it is left to the tenant to figure out which time period applies to them). Tony was also confused because there were multiple agents claiming to represent Fannie Mae. After a couple counseling sessions on our hotline, Tony responded in writing to Fannie Mae asking for a clear point of contact. With further help, Tony successfully pushed back against his notice to move and was able to negotiate a year lease with Fannie Mae. He is currently working out the details of the agreement, but we are happy he’s met his goal of being able to stay in his home as long as possible!

If you or someone you know is a tenant in a foreclosure situation please have them call our hotline at 888.495.8020 to speak with one of our trained volunteer counselors.

Assemblymember Ammiano introduces bill to prevent public pension investments in predatory schemes that displace tenants

We're very pleased to announce that State Assemblymember Tom Ammiano has introduced AB2337, a bill that would prohibit the use of state public pension funds in "predatory equity" real estate investment schemes.

Predatory equity is a particularly nasty form of real estate speculation that has a devastating impact on tenants and their larger communities. In these schemes investors knowingly pay far more for properties than they are worth based on actual rental income. The investment model is predicated on displacing low and middle-income tenants so that rents can be drastically increased or so that units can be vacated and converted to high-priced condominiums.

California public pension funds, CalPERS and CalSTRS, have both been the subject of nationwide media attention for their controversial investments in predatory equity schemes in California and New York. Tenants caught in one such scheme in East Palo Alto have faced unjust evictions, excessive rent increases, harassment, serious maintenance neglect, etc. The very future of EPA as one of the last affordable communities in the Silicon Valley region has been seriously threatened.

Today's Wall Street Journal covers this very topic in the article, "Backlash hits CalPERS property deals."

"It is unconscionable that hundreds of millions of dollars in public funds have been used in efforts to evict tenants from New York to California,” said Ammiano. “Actions speak louder than words and CalPERS needs to make its claim of socially responsible investing a reality.”

For more than a year, Tenants Together, along with tenants, activists, and elected leaders from East Palo Alto, has been pressuring CalPERS, the nation's largest public pension fund, to adopt its own policies that would prevent it from becoming entangled in predatory equity schemes. CalPERS' failure to take action has made the move to create legislation to address this issue a necessary step.

“The retirement funds of working people should not be used to evict working people. We applaud Assemblymember Ammiano for introducing this important bill that will ensure that public employee pension funds are not invested in predatory schemes that displace renters,” said Dean Preston, our executive director.

CalPERS a co-author and signatory to the UN Principles of Responsible Investment, has taken pride in being a leader in socially responsible investing. Yet it has invested hundreds of millions of dollars, with partners Page Mill Properties in East Palo Alto and with Tishman Speyer/BlackRock in New York City, in speculative real estate schemes that have proven disastrous for tenants.

The investments have also proven financially irresponsible to the public employees who have entrusted the pension funds with their retirement savings. It appears CalPERS will lose at least $600 million and CalSTRS $100 million in predatory equity schemes on both coasts as the risky investments faced push back from tenants and the properties eventually went into foreclosure.

Chris Lund, a tenant and spokesperson for the EPA Fair Rent Now Coalition who has witnessed first hand the devastating impact the schemes have on communities, also applauded the introduction of AB2337. "At its heart, this bill introduces greater transparency and accountability into California's pension fund investment decisions, something that will benefit communities across the country."

Ridgecrest Tenants Win Kern County's First-Ever Tenant Protection Law

Last night marked a historic moment for tenant rights in Kern County. In the span of just three months, determined Ridgecrest tenants, working with Tenants Together, organized and successfully pushed city officials to pass a just cause eviction law for tenants in bank-owned properties after foreclosure, the first tenant protection law ever passed in Kern County.

"This is a great day for Ridgecrest tenants and for the entire community," said Bob Nostrand, a Ridgecrest renter who helped lead the effort to get the law passed. "This will bring desperately needed relief to renters who are innocent victims of the foreclosure crisis."

Ridgecrest now joins the cities of Richmond and Los Angeles in addressing the crisis facing tenants in foreclosure situations by passing new just cause eviction laws that will allow innocent tenants to remain in their homes after bank repossession.

“We congratulate Ridgecrest residents and their leaders for passing this essential law," said our director, Dean Preston. "Our communities are fed up with unfair evictions by huge national banks. This kind of eviction law is a cost-free way for local governments to protect their residents from unfair displacement, prolonged vacancies and blight.”

This extraordinary victory for Ridgecrest renters should inspire other cities across California and the United States to protect innocent tenants from displacement and homelessness by implementing similar just cause eviction laws.


Nela Hadzic of Tenants Together meeting with La Mirage tenants Jimmy Paterson, and Kellye McClarity

As told in an earlier blog post, we have been honored and pleased to work for the last few months with an extraordinary group of tenants from the La Mirage Complex in Ridgecrest. We first learned of their plight in May of this year via our tenant foreclosure hotline. After receiving calls from dozens of tenants living the La Mirage neighborhood, we began to investigate and soon discovered that many Ridgecrest renters -- like renters in San Diego and Escondido -- had become victims of a statewide mortgage fraud scam involving convicted felon, James McConville and his affiliated real estate investment companies.

Virtually all of the 300 units in La Mirage were in foreclosure or facing impending foreclosure and virtually all of them were renter-occupied. Residents were facing eviction due to no fault of their own in in a city with a less-than-1% vacancy rate and had essentially nowhere else to go. [Media coverage.]

To make matters worse, many tenants were almost completely in the dark about the status of their homes and were unable to get accurate information from their management company, Diamond House Development. Diamond House, not coincidentally, was run by McConville the central figure in the mortgage fraud scam. Tenants were reporting that trustee sale notices were being removed from the front doors of units by the company's staff. Tenants were receiving 3-day pay or quit notices from Diamond House even after the homes had gone into foreclosure and it was not at all clear that they were legitimately collecting rent on behalf of the actual owners of the properties.

Tenants Together began to meet in phone conferences with groups of La Mirage tenants. Tenants started organizing and on May 20th they showed up in force at a City Council meeting to voice there issues and demands. [Media coverage.]

We issued a press release and statement calling for the city to take swift action to help tenants. We also suggested that, until Diamond House Management could provide evidence that it was legitimately collecting rent on behalf of the actual owners of the properties, that tenants might want to withhold and set aside their rent. As we suspected, many tenants who withheld their rent were never provided with such evidence and were never given pay or quit notices or eviction notices.

Fortunately, after sufficient light was shed on the situation, Diamond House backed off some of its more questionable practices, but the fact remained that numerous innocent tenants were facing eviction and had few if any options for places to relocate to in the community. Ridgecrest was in the midst of a full-blown housing crisis and City officials needed to take swift action.

Two of our staff and one board member traveled to Ridgecrest to meet with tenants and community leaders and to participate in a town hall meeting for La Mirage tenants along with Greater Bakersfield Legal Assistance and the Kern County Housing Authority. At the town hall meeting, the city council chambers were packed with Ridgecrest tenants who came to learn about their rights and to tell their stories and voice their concerns to the City Council members present at the meeting.


La Mirage tenant and activist Bob Nostrand



La Mirage Tenant and activist Cora Campbell



Tenants filled the City Council Chambers at a Town Hall meeting where Tenants Together participated along with Greater Bakersfield Legal Assistance and the Kern County Housing Authority.

At this meeting and at a full city council meeting the following evening, La Mirage tenants and Tenants Together called on the City Council to quickly draft and pass an eviction protection ordinance, similar to one that had just passed in Richmond, to stem the epidemic of unnecessary evictions due to foreclosure.

During our visit to Ridgecrest we were able to meet face-to-face with tenants in their homes where we heard their sometimes heart-breaking stories. We were so inspired by their awaking tenant consciousness and their determination to advocate for themselves and their neighbors. Folks who had never-before set foot in city hall were become savvy, outspoken activists and they were clearly making a difference.

Over the coming weeks we remained in close contact with these tenants as they repeatedly brought their stories and demands to City Hall pushing the City Council to act. One council member in particular, Jerry Taylor (pictured right), proved to be a forceful advocate for renters by championing the ordinance and pushing his colleagues to support it as well. Councilmember Ron Carter took a strong stand for the ordinance.

Despite pushback from developers and local realtors, within about two months, the city council has passed a just cause eviction law and history has been made for tenant rights in Ridgecrest and Kern County. Again, communities across the state and the country should take notice and follow Ridgecrest's lead in protecting tenants in foreclosed properties.

We wish to thank and congratulate the tenants of Ridgecrest who boldly stepped up and worked so diligently for this victory. Their efforts should serve as a model for others to follow throughout California.


La Mirage tenants Karen and Miguel Martinez

Ridgecrest Tenants Organize

Tenants in the city of Ridgecrest, California are rising up and organizing to face a serious housing crisis triggered by a statewide real estate scam. We've been most fortunate at Tenants Together to have the opportunity to work with these inspiring tenants who have stood up for their rights, are working to form a new tenants association, and are pushing for local legislation that will help renters keep their homes -- renters who face eviction due to no fault of their own.


La Mirage Tenants outside the City Council Chambers in Ridgecrest, California

According to media reports, from publications such as Voice of San Diego and the News Review, a one James McConville (yes, Con-ville, a name almost too perfect to be true) of Freemont, CA, orchestrated an elaborate statewide mortgage fraud scheme in which he set up "straw buyers" to unwittingly purchase residential properties. Straw buyers were led to believe they were lending their good credit scores to McConville in exchange for a few thousand dollars so that he could take out mortgages in their names. The buyers believed the loans and properties would be promptly transferred out of their names. In reality the loans remained in the straw buyers' names. Buyers didn't realize they owned the properties and so were not paying the mortgages. Meanwhile, the properties were rented to unsuspecting tenants. Hundreds of these properties have now gone into foreclosure in places like San Diego, Escondido, and Ridgecrest and as a result hundreds of innocent tenants have lost their homes.

The community of Ridgecrest has been hit particulary hard by the ripple effects of the mortgage scam. Not only is the city experiencing mass foreclosures, but tenants have been served invalid eviction notices and have been told to pay rent to McConville's management company, Diamond House Development, even when there was no clear indication that the rent was being legitimately collected on behalf of the actual owners of the property. To make matters worse the isolated community has a very low vacancy rate and many evicted tenants cannot find places to move to.

Tenants Together received numerous calls from Tenants at La Mirage wanting to know their rights and wanting to make sense of the foreclosure notices they were receiving.

It immediately became clear that the Ridgecrest city government needed to step in and address the city's housing crisis. Tenants began to organize and attend city council meetings demanding that the city take action. Tenants Together initially met with groups of tenants over the phone and then visited Ridgecrest in June where they participated in a city-hosted town hall meeting along with representatives from Greater Bakersfield Legal Assitance and the Kern County Housing Authority. Tenants packed the City Hall chambers to learn more about thier rights and to voice their concerns and demands. City Council members present insisted that they had received the message and would take action.



Tenants in La Mirage are continuing to work together and plan to establish a Ridgecrest tenants association to make certain that tenants will continue to have a voice and continue to be heard.

Infamous SF Landlord Takes A Hit: Gives Bank 51 of Its Buildings to Avoid Foreclosure

For all of those who have stood up to the abusive tactics of one notorious San Francisco landlord, there is a measure of satisfaction in the news that the CitiApartments/Skyline conglomerate has been forced to give up 51 of its buildings.

The San Francisco Business Times reports that San Francisco's second biggest landlord has deeded 51 buildings back to its lender (UBS bank) rather than face foreclosure, giving up ownership of an estimated 1500 apartments in San Francisco. From what we hear, this may be just the tip of the iceberg.

Tenant advocates have warned for years that CitiApartments and its related entities are engaged in a nasty type of predatory equity -- overpaying for apartment buildings with the plan to force out low-rent tenants and replace them with high-rent tenants. Lembi's entities have faced numerous lawsuits for harassment and other abusive tactics, including a lawsuit brought by San Francisco's city attorney who commented that "the facts revealed by my office's investigation demonstrate very clearly that the owners of Skyline Realty and CitiApartments made a calculated business decision to operate in violation of the law -- and to do so consistently."

Apparently the business model of overpaying for apartment buildings on the assumption that you can bully rent-controlled tenants out of their homes and get higher rents isn't such a winning strategy after all.

Unfortunately for tenants of these buildings, CitiApartments will continue managing the buildings. It remains to be seen whether the tenants' situation will improve or get worse under CitiApartments' management when the company no longer owns the buildings. Bank owners are not know for being good landlords, as tenants in foreclosed properties across the state know. So tenants in these buildings may find themselves going out of the frying pan and into the fire.