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Few remedies for renters living in foreclosure properties
Arizona's foreclosure rate is up 4 percent from last year November, with one in every 260 homes in some stage of repossession by the bank. One group of people often overlooked in the foreclosure part is renters. Many find themselves caught between landlords who don’t give them any notice of foreclosure, and banks that are legally barred from speaking with them. KJZZ’s Weston Phippen reports.
WESTON PHIPPEN: Karolynn Ganza rents a 1,700-square-foot house in Mesa with her four dogs, two kids and her daughter’s boyfriend. The house isn’t spectacular, but it’s roomy. And it has a yard. She moved in more than three months ago. And soon after, she got a foreclosure letter in the mail.
KAROLYNN GANZA: “I came home on my lunch from work and I got the mail and I opened it up and saw it. I was very angry. You know? And what am I supposed to do? And I didn’t know what my options were right then and there and I’m thinking the holidays are here?? am I gonna have to move? Am I losing my home? It’s frustrating.”
WESTON PHIPPEN: Ganza pays 900 dollars in rent each month. When she called the owner’s property manager, the company told her it must be a mistake.
KAROLYNN GANZA: “They’re denying it. I don’t know how they can when it’s written -- they’ve got a court document -- but they’re denying that there is anything going on.”
WESTON PHIPPEN: So here she is, still sending rent each month to someone who isn’t paying the mortgage. She’s the odd man out in a game between the bank and the landlord.
KAROLYNN GANZA: “I just feel like I’ve been stolen from in a way because they’re taking my hard earned money.”
KEN VOLK: “It’s theft, pure and simple as far as I’m concerned.”
WESTON PHIPPEN: Ken Volk runs the Arizona Tenant Advocates Association. He says there are no statistics on how many renters send money to landlords that never pay the mortgage. The Arizona Housing Department and a research professor at Arizona State University both agree. But about a year ago Volk would get three or four calls every day from people like Ganza – now he says it’s about one a day. Volks says the law is clear that even if a home goes into foreclosure, the renter needs to pay. But there’s no law that forces a landlord to us that rent to pay the mortgage.
KEN VOLK: “You would think the most fundamental thing a landlord should pay in order to assure he can provide what he says he can provide is to pay the damn mortgage. And yet they just pocket the money.”
WESTON PHIPPEN: There ARE state and federal laws that provide some protection to renters in this position. Two years ago, Congress passed a law that gives renters 90 days to move after the home is sold at auction. Arizona has also passed a law that requires landlords to notify a renter if they’re moving into a house that’s already in foreclosure. But Volk says if landlords break the law and don’t give notice there’s still little a renter can do.
KEN VOLK: “How can you fix something after the milk has spilt?”
WESTON PHIPPEN: Renters could take their landlords to court. But who can afford that these days?
Clare Abel represents banks and lenders in these situations for the law firm of Burch and Cracchiolo. She says banks can’t legally work with the renters because the bank’s contract is with the homeowner. Abel says that if homeowners won’t talk, renters are left in the dark.
CLARE ABEL: “The people who work for the lenders are humans too and they want to be able to answer the questions. But they’re legally prevented from giving any information whatsoever.”
WESTON PHIPPEN: Ultimately it’s the landlord who holds the power. And sometimes the landlord chooses to work with the renter. In fact, Mesa renter Karolynn Ganza has been through this before. Two years ago the condo she rented went into default, but the landlord told her the foreclosure was coming and even gave her a couple months of free rent.
KAROLYNN GANZA: “At least that landlord was upfront with me. He was a good guy.”
In the end, Ganza thinks all the laws, contracts and courts won’t help her or anyone else in a similar position. To her the problem is simple:
KAROLYNN GANZA: “People don’t care about other people. And that’s the problem. It’s one of the problems of the world of course, but people don’t care about what happens to other people.”
WESTON PHIPPEN: So the next time she rents a place, Ganza says she’ll ask the landlord for some verification that the mortgage is being paid. She figures, if landlords check to make sure she can pay her rent, then she should be able to make sure they can pay their mortgage. For KJZZ, I’m Weston Phippen.