A Very Angry Woman

I ran across a comment on one of the housing bubble blogs yesterday that left me fuming. It wasn't the post, but the comment by the realtor who works with banks to remove former homeowners and tenants from foreclosed houses. For tenants, he says, he's rather more generous, offering tenants two weeks to move and a small "cash for keys" payment in lieu of return of the tenant's security deposit. I was afraid that the banks were doing stuff like this. At the same time they're convincing our alleged representatives in Congress to take the few resources allocated to affordable housing to subsidize the banks, they're sending their minions around to induce tenants to give up what few rights they have for a piddling cash payment.

For instance, our realtor "offers" two weeks of free rent, without informing the tenant that, in California, tenants must be given a 30-days' notice of eviction. Most tenants, especially tenants without much money, need the time more than they need the money. The cost of storing goods and staying in a motel would cost more money than the realtor is offering. But most importantly, our realtor informs the tenants that the lender doesn't have to return the security deposit. That's not true. California's security deposit law was written to deal with the problem of landlords who claim that the former landlord never handed over the security deposit. It makes the landlords responsible for handing over the deposit, either transferring it to the new landlord or returning it to the tenant. If the tenant doesn't get the deposit back, it's assumed that it is transferred and the lender (as evicting landlord) is responsible for returning the deposit.

So this is what I think is going on. Foreclosure services and lenders are sending their minions to find tenants and scare them into accepting a pittance in exchange for what few rights California tenants have in foreclosure. The banks aren't even returning security deposits, ferhevensake! If one were less cynical than I am, one would think that our state and local legislators would take some action to stop this behavior, either passing legislation (their job) or, at the very least, providing the kind of information that would enable tenants to--I was going to say enforce their rights--but more basically, to know what their rights are. But our legislators know where the money is, and silence is easy.

What's most interesting is that the realtor doesn't see any reason to hide what he's doing. Not surprising, though, when the real estate reporter for our local paper spends much of his time writing about his conversations with realtors--and yes, it's a good time to buy.