Dear Michael: I refinanced my home to help a friend that was in dire need of money. That same friend had promised to pay me back but never did. I just filed for bankruptcy as my debt was too much for me to handle. Do I have any recourse against my so called friend who let me down and caused me to go bankrupt?
Answer: I am very sorry that you had to declare bankruptcy, but you can only blame yourself for having gone as far as to refinance your home to lend money to a friend. Refinancing your home in a declining market is a risk in itself. The only reason anyone should refinance their home is for an absolute emergency reason. If you did not have a contract with your friend, then you’re out of luck. Even if you did have a contract stating a payback method, I can guaranty you that your so called friend probably does not have the money to pay you back. I hope you learned a valuable lesson and learned that lending money to a friend will often mean losing that friend. Please contact an attorney to review the details of your contract.
Dear Michael: I renewed my lease in October. My building has currently listed apartments that are larger than mine and on a higher floor for less than my current rent. Is there any recourse for this type of situation? I’ve already called the management company, and they state that I have to honor the lease.
Answer: If the apartment is not subject to rent control or rent stabilization, there are no limits on the amount of rent the landlord may charge to a willing tenant. The lease agreement becomes a binding contract and the landlord and tenant are each held to their end of the bargain. The fact that the landlord is now offering similar or better apartments at a lower rent is not, itself, proof of deception. Changing circumstances that make a lease bargain less beneficial, such as a weakened rental market, do not affect the validity and enforceability of the lease. If the apartment is rent-stabilized, the renewal rent may not exceed the legal regulated rent for the apartment, and while the landlord can offer to accept a lower rent, he or she is not obligated to do so. Tenant’s who are uncertain as to the rent regulatory status of their apartment, or its legal regulated rent, should contact the Housing Right Center at 866-477-5977. One more thing; If you are on a month-to month tenancy, ask your landlord to reduce your rent to the current rental rate of the building. Let him/her know that if your rent is not decreased you will move out. Let’s see if he/she calls your bluff. Worst case scenario is they say no.
Dear Michael: I am interested in purchasing an REO (real estate owned). Is there a way to find out how much the previous owners owed on the property? I understand that most houses are listed at fair market value even if they are REO’s but this one is a bargain.
Answer: In states where a mortgagee has to file a suit to foreclose on a mortgage (judicial foreclosure), the easiest, least expensive way of finding out the previous owner’s indebtedness on a foreclosed property is to go to the courthouse for the county in which the property is located. There, with the help of a friendly court clerk, you can look up the case file for the foreclosure action and get a copy of the judgment. That should show the principal balance owed, accrued interest and court costs assessed against the borrower in connection with the foreclosure. In non-judicial foreclosure states as California, your information won’t be as precise. You’ll have to go to the county recorder’s office and get a copy of any unsatisfied mortgages filed against the property. With the information found in those documents, you’ll be able to, with the help of a loan amortization spreadsheet, be able to back into an estimated principal balance as of a given date. You’ll have to “guesstimate” the accrued interest and costs of foreclosure, but you should still have a pretty good idea. The other option, regardless of whether you are in a judicial or non-judicial foreclosure state, is to pay for the information. In many jurisdictions you will find companies that sell information about foreclosures. Good luck in your search, and please understand that what the prior owner owed on the home has no impact on the current price of the home.
Michael Kayem is a Realtor with Re/max Execs serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com