residents beg for mercy

As the thought that trailer/mobile/manufactured home parks are big business spreads across the nation, my thinking that blackmail and extortion were against the law is apparently wrong. As park owners and their lawyers back small and large cities alike into a corner, they seem to be allowed to use any methods they deem necessary to win.

In most of the youngest yrs. of my life, I started out in a “trailer park” of about 10 or 12 (trailer) homes lined up across the road from each other on a farmer’s property in North Carolina.  It was one of the biggest and best for it’s time, 10 x 50, 2 bedroom, 1 bath, and we had a big lot. At that time, when my father got a job in town and we needed to move, we just hitched the trailer to the back of the car, left the porch (Florida room) behind, and we were gone.

As I got older and was a real estate professional, I learned they were no longer “trailers”, they were mobile homes, and they were bigger and more beautiful than ever. Between friends and clients that had mobile homes, I could see that if you wanted the best “bang for your buck” this was the way to go. They had built-ins that were beautiful, and no ‘stick’ or ‘site’ house at a reasonable price could match the amenities. Yet as early as the early 80′s I came across a greedy park owner in Milpitas, Calif. that had found a way to circumvent the Mobile Home Residency Law and rent control by offering 5 yr. leases. At that time, if I remember right, the statewide law was that the park could only raise the space rent 5% to a new buyer, unless they offered leases longer than 12 months.

Now I’m back to living in a mobile home as society makes the transition from “mobile homes” to “manufactured homes”. I found the info below on the Consumer reports type website:

A recent survey finds that 19 million people — 8 percent of the U.S. population — lives in 9 million manufactured homes, as opposed to “site-built” homes, as the trailer trade refers to traditional houses.  The average manufactured home owner is 53, with a median household income of $24,500. Eighty-three percent are high school graduates; 46 percent attended college. Why so popular? Probably most important, manufactured homes are affordable.

Of the foreclosures you hear about all over the news these days, the majority are not mobile/manufactured home owners. Those people purposely chose this lifestyle because it was “affordable”. Manufactured homes are better than ever. Along with that is the lack of ability to still be able to “hitch it to your car and drive away”. They are more beautiful, more expensive, and more stationary, than any of  their predecessors. Now that mobile/manufactured home owners are trapped by where they have chosen to live, park owners and their lawyers have moved in for the “kill”.

In our park recently, many of our residents were forced by the park owner      and

Tearing down a home, a history

his lawyers to give up their first amendment rights in order to get a lease that would protect them when the city repealed it’s rent control ordinance. Originally the City had postponed doing anything more regarding repealing rent control. As they repealed it last night, one of the councilman stated they had to in order to protect the residents in our park that were actually offered leases.

What happened here? The park owner and his lawyers blackmailed the residents into signing hianus leases with the threat of pulling the leases already given to a very few park residents that truly needed them (like a case of life of death). Then the park owner and his lawyers threatened the City that if the City didn’t repeal their rent control, they would pull all the leases from the extremely low, medium low, and moderate income people. In the settlement agreement that the people made with the park owner and their lawyers they agreed to:

1. Not show up at the City Council meeting or any other public meeting regarding the repeal of rent control for 30 days (Right to peaceful assembly)
2. Not oppose any repeal of rent control within the City (Freedom of Speech)
3. Not initiate any successful referendum fighting the repeal of rent control within the City.  (California Constitution)

I can’t believe that this is all documented publicly, and they are getting away with it. Even taking advantage of legal services for the poor, with all the budget cuts, etc. those people aren’t equipped to fight this. What’s even worse is the lawyers that understand and know mobile home law are very few. There really is no justice for the poor. This has turned into big business for these park owners and their lawyers. Rents in this dilapidated park for small spaces of dirt, have gone from $2-400 per month to $1300-2800 per month, and that’s just for the dirt people’s homes sit on.

I’m not a lawyer, so I can’t really say this is blackmail or extortion by the letter of the law, but that’s sure what it looks like to me. All this time I was thinking blackmail and extortion were against the law.

Tearing down a home, a history

I’d jump the bridge, but too many friends live underneath it. I’m sure many of you who have gone through foreclosure, or lost your home in any other way that wasn’t of your making, may be feeling the same way.  Maybe many of your neighbors have lost their homes to whoever their lender was. The difference is there is new legislature almost every other day to protect people in their homes, whether they be renters or owners, unless you live in a mobile/manufactured home.

As I wrote in my last post in June (I really have been away too long), the City Council of Capitola had come to an agreement with the owner, Ron Reed, of the Surf and Sand Mobile Home Park in order to get rid of a couple of lawsuits Mr. Reed had filed against the City. You can see the post “Real Estate And Politics” here.

Since that took effect I have one neighbor who is all but bedridden with depression and worry. I have four neighbors on my street or the cross-street who have just given up their homes.  And a week from yesterday, my own mobile home will go to auction for “storage fees”.  In 9 months of paying rent here, the park owner has never given me the right of tenancy, and as soon as the City Council did their thing with the new ordinance, he raised my rent by triple-plus what is was originally. What’s funny is I would pay his raised rent, but then he still would not give me tenancy, so what good would it do?

It’s sad enough when it’s a matter of the economy. Yes there are so many people that say “well they shouldn’t have bought a home they couldn’t afford” when it comes to foreclosure. Has anyone else noticed that it’s people with super credit that are also losing their homes  now? No matter how good they were about paying bills in the past, that now without a job, they can’t be A+ anymore?

And for Capitola, it’s even more sad when a town of only 10,000 people have hired a “goon squad” for a City Council. What’s really sad is some of us did it to ourselves. We voted for these people. Why? Because they all said they were interested in fighting for the same causes we were. Now, not even a year later, they have hidden their tails between their legs, and turned on us.

Across the nation lawyers are getting rich and mobile/manufactured home park owners are getting richer. In our own park the landowner supposedly made $420,000. last year even with rents under rent control, and never put a dime back into the park.  People have had to tear down and rebuild here because the infrastructure won’t take the 50 amps of a new manufactured home, it can only sustain 30 amps because the infrastructure has never been kept up to date.  So people have to amp down their homes in order to live here.

I cry as I write this morning, not just for myself, but for all the people everywhere who are losing their homes to greed. Most of these park owners don’t live in their parks like the old “mom and pop” owners did. Many are bought up by corporations strictly to see how much more money they can make. They are accomplishing it by bringing cities to their knees in lawsuits and paperwork.

Most people bought their homes here because they planned to retire here. They wanted something they were sure they could afford. Now the Capitola City Council is running from different lawsuits and is planning on repealing rent control completely.

You ever wonder how the politicians ever got so bad that we have in Washington? They got trained in hometowns across America.

The hole that's left

As I wrote in my post “When Property Rights Collide” Mobile/manufactured home park owners have been at war with park residents across the nation, and especially in California, concerning space rent and rent control.

Last week in Goleta, CA, there was a landmark case where the Supreme Court refused to hear an appeal by the park owner regarding the “taking of his land for public use”. The park owner had won in the lower court fighting Goleta’s rent control ordinance. The park owner lost in the Ninth District Court of Appeals, and by the Supreme Court refusing to hear the case, it sets a precedence that the Appeals Court ruling stands. This helps cities everywhere that are trying to protect their elderly and lower income mobile home citizens by fighting for their rent control ordinances.

What the City of Capitola has chosen to do is re-write their rent control ordinance and add a “Subsection D”. This section de-regulates rent control for the mobile home parks in the City that still rent out spaces instead of being resident owned. Due to this new “Subsection D” I have learned more about real estate and politics than I ever wanted to know.

As a result of the City Council passing the new ordinance (behind locked doors during a flood, I might add), the mobile/manufactured home residents chose to gather signatures for a referendum to either repeal the ordinance, or put it on the ballot before the voters. Due to a technicality (the pages weren’t stapled together properly with the ordinance when turned in), the City sited the referendum as “insufficient”, which means it goes no further than City Hall.

The effort was put forth by many of the low income citizens who now cannot afford the $15000 or $30000 the lawyers say it would cost to fight it in court. For now, the City has won and the new lease packets have been sent to the residents in the Surf and Sand Mobile Home Park stating what the new rents would be for each space.

The packet I saw was approx. 252 pages long and asked for everything from the resident’s name to her underware to prove she was low income and qualified for the lease she was offered. This same packet has been sent to other residents in the park that are in their 80′s or 90′s, or mentally/physically challenged and they have 21 days to respond. This lease would take a month of Sundays and a half dozen attorneys to get through in a lifetime. I don’t know how these people are supposed read, let alone understand what they are signing if they accept.

The rents range from $475 being the new low for “extremely low income” to $2800. for those not categorized in the extremely low to low, to moderate income categories. Many people do not know what they will do, and everyone has lost any equity in their homes that they may have had. While going through this myself here, I can only imagine the devastation to the people at the De Anza Mobile Home Park where their rents are now anywhere from $2000 to $5000 per month.

As for everything any kind of government does, it seems this is yet another case where they have over compensated and gone from one extreme to the other.

The residents aren’t thru yet. There is still a possibility of getting free legal through Senior Services, or many other alternatives yet to try. If you happen to be a mobile/manufactured home park resident where ever you are and haven’t been able to purchase your space from the park owner, be vigilant about maintaining your rights. Many people here didn’t bother to get involved until there was too much at stake.

Scene across the street

I have to say in the last few weeks I have learned more about California Mobile Home Residency Law, Turn-coat city politicians, and how “he who has the gold makes the rules” than I ever wanted to know at this close range.

I have learned that when it comes to the laws to protect mobile home owners, the agency who made the laws has nothing to do with enforcing them. You can have a slum landlord for a mobile home park as well as you can an apartment building. Who do you go to to report violations of the law? You sue him in court.

Then there are the rent control ordinances of cities and municipalities. Not every city has rent control laws, but the ones that have put them in place to protect their senior citizens and their low income people from becoming homeless, put them there originally for a reason. In the General Plan there is usually a certain “allotment” for senior and low income housing. Cities will bribe new developers or take advantage of already existing housing to fulfill those numbers. Not everyone has good intentions though when it comes to this kind of housing.

There are mobile home owners all over the state of California suing

$19000.00

cities over rent control ordinances pertaining to their properties that were originally designed to be rent controlled mobile home park spaces. Years later, kids have inherited the properties, conglomerations have bought the properties thinking they are going to get rich from the land even though they bought them under rent control, and suing the cities until they can’t bleed anymore money, and cave in. I have a mobile home in such a park.

Capitola is a beautiful ‘City-By-The-Sea’ as it says under it’s ‘Welcome to Capitola’ signs. Capitola Village is small and quaint and full of out-of- towners when ever the weather permits. The man who originally owned this mobile home park that sits up on the hill at one of the entrances to the city, originally had this land and invited his friends to bring their trailers there for vacations and holidays. It soon turned into a trailer park for ‘Seniors’. Many years later it became a ‘family’ or all age park, but it is still pretty populated with our seniors who have come here to retire and live in one of the most beautiful spots in the world. Some aren’t in so good a shape. Others have put their whole life savings into their homes here. Many are on low fixed incomes that couldn’t afford to be anywhere else.

Now the man has long since died, and his son and grandson see this property as a goldmine. The owner has been suing the City until now, when there is a light at the end of the tunnel, it looks like an end to the fighting, the City has decided not to fight him any more and has totally rewritten their own rent control ordinance to benefit this one man. Well, I shouldn’t say to benefit only one man when it turns out the city itself owns one of these mobile home parks and wants to turn it into a parking structure. This change in the ordinance will help the city raise rents on that park and force people out the same way the owner of this park will do here. There are a total of 3 other mobile home parks that will suffer the same fate as we shall as soon as this ordinance is passed.

The equity in our homes will be completely gone as the rent for our spaces go up, left to the discretion of the park owner. It’s already happened in Santa Cruz. That city council did away with the rent control and now you can buy a beautiful mobile home there for $19000.00 that no doubt cost the seller $100,000.00. Did I forget to mention the space rent is only about $2100.00 to $3000.00 per month? It’s one thing to lose your equity over an over all economic condition like we are all going through, but to have a small public entity that you voted into council just rip it out from under you seems to hurt even more. I wonder how some of these people will afford the new rent on their monthly social security?

I went to one of my first city council meetings last week when they did the ‘first reading’ of the new ordinance. The politicians don’t tell the truth anymore in a small town then they do when their running for President. They exaggerate how much the city has spent to defend us. They don’t tell the truth about how much the mobile home parks have paid of those fees. They actually planted people in the audience to get up and speak in favor of the new ordinance because they new real citizens wouldn’t do it.

If it wasn’t so appawling I would be laughing. One city councilman actually had his campaign manager stand up. They called in an old city councilman that had lost in the last election. There were 3 others that “acted” like concerned citizens. How ridiculous is that? LOL.

House Flipping

Speaking of house flipping, did you hear the one about the 10 people indicted on Friday for bilking mortgage lenders out of over $20 million? These 10 people devised a scheme where they not only put in loan applications for people that didn’t exist, but they kept flipping the same house(s) to inflate the price thus being able to borrow more money.  The Feds are looking at them for bank, mail and wire fraud, plus money laundering. I guess it was good while it lasted. LOL.

Maybe you heard the one about the unregistered sex offender (ex-firefighter) and his partner that were contacting owners of homes before they went to foreclosure sale. They would get the homeowner to relinquish the property and then “flip” it to a new buyer. The buyer would put down a down payment or a mortgage payment, and these two gentlemen would use it for what ever they chose instead of getting the house out of foreclosure. Their scheme involved about 10 houses and they were headed to California presumably to do the same.

Maybe you heard about the sale “rigging” going on on the courthouse steps? A group of investors get together and pay people not to bid on particular properties so as to not inflate the price. What this would mean to you if you were a homeowner whose home has gone to sale, is if your home might have sold for more than you owed the bank, you may have received “proceeds” from the sale. If investors are paying to keep the bids down, there isn’t much of a chance of that happening.

Even builders are getting in on the act. A builder in Ohio built high-end luxury homes. He would then sell it to a “straw buyer” and submit false loan applications and contracts stating he received down payments he never received. The builder then got to walk away from approx.  $3.5 million in mortgage debt, and gained about $500,000 in seller proceeds. They have so many counts against this guy, he’ll be lucky if he ever sees the light of day again.

The hits just keep on coming! Speaking of “house flipping” did you hear the one about…?

Hey, I’ve just recently met Benjamin from Zion Engineering. If you have any demolition needs or remodeling, live in the San Francisco area, this guy and his team are a wonder. Visit their website and then give them a call. Tell him “Lauri” sent you.

Only it’s not the end. In a simultaneous escrow the investor has already “flipped” your house to another buyer for a hefty profit. You don’t know anything about this transaction. Wouldn’t you be upset if you found out? Wouldn’t you feel rather dumb that you didn’t get the price for the house that the investor was able to? Wouldn’t you feel taken advantage of?

This is basically what the real estate “gurus” are teaching when you hear about one of them putting on a seminar or a workshop. As a Realtor, we are not allowed to do this type of investing without full disclosure to all of the parties. It just seems to me if everything is above-board, that’s the way it should be.

HAMP, or the Home Affordable Modification Program was designed as an effort to help distressed homeowners modify their current mortgages. I can’t tell you how much I wish these programs had been in place 18 months ago. Now that they are here, more homeowners really ought to try and take advantage of them.

The homeowner criteria for qualifying is:

1) borrower is delinquent on their mortgage or faces imminent risk of default
2) property is occupied as borrower’s primary residence
3) mortgage was originated on or before Jan. 1, 2009 and unpaid principal balance must be no greater than $729,750 for one-unit properties.

After determining a borrower’s eligibility, a servicer will take a series of steps to adjust the monthly mortgage payment to 31% of a borrower’s total pretax monthly income:

• First, reduce the interest rate to as low as 2%,
• Next, if necessary, extend the loan term to 40 years,
• Finally, if necessary, forbear (defer) a portion of the principal until the loan is paid off and waive interest on the deferred amount.

Note: Servicers may elect to forgive principal under HAMP on a stand-alone basis or before any modification step in order to achieve the target monthly mortgage payment.

While the program provides incentives for the lender, I can see where it doesn’t seem like enough to make it worthwhile on the lender’s end to co-operate. Also note that these guidelines are guidelines the industry can use but doesn’t necessarily have to.

Many of the participants in this part of the Make Home Affordable Program are now suing many of the big lenders such as B of A, Wells Fargo and JP Morgan Chase. It appears that these lenders have given trial modifications to borrowers and then, even though the borrowers have met their end of the obligations, the lender never makes it a permanent modification. This ends up leaving the distressed homeowner more distressed than ever.  Many times the lenders don’t even tell the homeowner why they are canceling the modification agreement. These lawsuits are picking up momentum across the country.

Until recently with tighter laws, at least in California, this part of the program has been a feeding ground for crooks in real estate. Many claim to be able to get the distressed homeowner a loan modification to avoid foreclosure, charge up front fees, and then disappear. New laws have made it so that no one may charge an upfront fee for any of these services.  The borrower could do the negotiating with the lender themselves. Any previously approved companies that were allowed to charge fees, the approval has been revoked. If you are in the state of California and someone is trying to charge you an upfront fee for these services, you should report it to the Dept. of Real Estate right away.

There are plenty of Realtors out there that would be happy to help for free, including myself. Feel free to contact me anytime.

As Realtors we are reminded all the time about safety when it comes to holding open houses, but here are some open house safety tips for home sellers.

You are trying to sell your property and have decided to hold an Open House. While an open house can be a great sales tool, but it also exposes you to numerous unfamiliar people for the first time. Stay safe by practicing these guidelines.

I would say the number one tip is to hold the open house with someone. As they say “there is safety in numbers”. If you can get a spouse, neighbor, someone to sit with you through the open house hours. Not all agents, buyers and sellers are who they say they are. Predators come in all shapes and sizes. We tell our children not to talk to strangers. You need to be aware of who your are talking to also. If you have a gut instinct something isn’t right, follow your gut.

Strangers will be walking through your home during showings or open houses. Hide any valuables in a safe place. For security’s sake, remember to remove keys, credit cards, jewelry, crystal, furs and other valuables from the home or lock them away during showings. Also remove prescription drugs. Some seemingly honest people wouldn’t mind getting their hands on a bottle of Viagra, uppers or downers.

Call the local police department and ask them to have a squad car drive by during your open-house hours.

• Check your cell phone’s strength and signal prior to the open house. Have emergency numbers programmed on speed dial. Make sure your cell phone is fully charged.

• Determine several “escape” routes that you can use in case of an emergency. Make sure all deadbolt locks are unlocked to facilitate a faster escape.
• Turn on the lights and open the curtains. These are not only sound safety procedures, but also great marketing tactics.

• If you were to escape by the back door, could you escape from the backyard? Frequently, high fences surround yards that contain swimming pools or hot tubs.
• When prospective buyers begin to arrive, jot down their car descriptions, license numbers and physical descriptions. (In theory this is great practice, but you may not have time if several buyers show up at once).  At an open house, be alert to the pattern of visitors’ arrivals, especially near the end of showing hours. In some areas, a group of thieves will show up together near the end of the open house and, while a string of “potential buyers” distracts the seller, the rest of the group walks through the house, stealing any valuables they come across.

• When showing the house, always walk behind the prospect. Direct them; don’t lead them. Say, for example, “The kitchen is on your left,” and gesture for them to go ahead of you.
• Notify a friend or a relative that you will be calling in every hour on the hour. And if you don’t call, they are to notify the police immediately.
• Inform a neighbor that you will be showing the house and ask if he or she would keep an eye and ear open for anything out of the ordinary.
• DON’T leave personal information like mail or bills out in the open where anyone can see it. Be sure to lock down your computer and lock up your laptop and any other expensive, easy-to-pocket electronics, like iPods, before your showing.
• You are responsible for your pets. If possible, animals should be removed during showings. Be aware that buyers and agents are sometimes attacked, and the owner will be held liable. Maybe you have a dog, cat or bird that isn’t allowed outside. Accidents happen. You wouldn’t want to find your pet out in the middle of the street.

Finally, whether after an open house or a standard showing, make sure that all doors and windows are locked. Thieves commonly use open houses to scout for valuables and possible points of entry, then return afterward.

I hope these Open House Safety Tips For Home Sellers help keep you aware and safe. As always, if I may be of service, don’t hesitate to contact me.

I felt so bad today. I called a friend of mine in Arizona and since his wife died recently, he needs his mortgage to come down only $100 a month. He’s an old Country Wide loan that now belongs to B Of A. They have been with B of A for many years. When my friend went to B of  A they turned him down because he wasn’t behind in his payments, even though he knew he soon would be if  they wouldn’t help him.

He found (or somebody found him) a company that charged him $4500.00 up front to take care of his mortgage. You could have knocked me over with a feather when he told me that. I have been sending him updates, told him to go to FHA, and this is what he chose. I am now hoping to God it works for him.

I am telling you people, and especially people in California, it is illegal for anyone to be charging you upfront fees without DRE approval. They revoked all approvals given to mortgage brokers, and no one may be approved unless they post some kind of bond (according to the attorney general) and I’m not even sure about that.

If you have someone approach you that wants to charge you before they have done anything, Please check with your lawyer. So many scam artists are taking advantage of peoples fears and lack of knowledge right now. Don’t be one of them.

If I can ever help, if you have any questions, feel free to call me anytime. It doesn’t cost you anything to become knowledgeable.

It has actually been a law for years that if you apply for a real estate loan, you are supposed to get an estimate of what that credit will cost you within 3 days of the day the loan application was taken.  For the most part the mortgage industry did that, except the estimate was just that. Merely an estimate and it was rarely correct.  If you’ve ever bought a home you know exactly what I’m talking about. It’s that piece of paper that puts you into shock when you look and see the $100,000.00 you’re borrowing to buy that $120,000.00 house is actually going to cost you $300,300. to pay back, or something like that. They figure in the APR which is the amount of the fees, etc. you are paying and shows what your loan may adjust to if you have an adjustable rate.

In the past, you’ve gone through the escrow period, you’ve gotten loan approval, you’re at the title company to sign off on the house you’re buying and low and behold, these are not the costs the lender had told you about. This is not the interest rate you applied for.  Welcome to one of the most stealth real estate scams ever run. You are at the perfect point where if you don’t agree to what’s before you in escrow, you don’t get your house. This was the perfect spot to insert a little “emotional blackmail”. This was an industry standard for many years and I personally have never seen one person in escrow refuse to sign.

Finally there is a new law to protect home buyers from this type of thing in the future. Oh sure, where there’s a will, there’s always a way, but for now it will be a little tougher. There is a “uniform” form to be filled out, lender fees cannot change between when you get the statement and when you get to escrow. All fees for closing costs where the lender has provided the service provider have to be within 10% of actual costs (which to me is still too much leeway). They still have to give you the estimate within the allotted 3 day time period from when they take your application, but for the most part there will be no more drastic and last minute changes in escrow.

This is supposed to provide a lot more transparency into actual fees the new buyer is paying, and to avoid any more of one of the oldest real estate scams on the books.

To see the new law, actually made in 2008 to take effect Jan. 1, 2010, just visit the HUD website, and click on RESPA. The FAQ’S may be easier to understand, and you can find them here RESPA.

If you have any comments or questions, don’t hesitate to leave a comment. If you’re looking to buy or sell a home, or if you’re a homeowner in trouble, visit my website at SiliconValleyRealEstateOnline.com and get some free information.