When renters end up in a foreclosed home
The number of foreclosures in Mecklenburg County has steadily increased since 2006. Last year, the sheriff's office served close to 9,700 foreclosure notices. While the obvious effects of foreclosure hit homeowners directly, another group of residents is affected - renters. This disruption in their lives is inconvenient, at best or could leave them homeless, at worst. WFAE's Simone Orendain reports: The patter of rain is steady on the windows of Clover Smith's home on a quiet street near Charlotte's Brookshire Boulevard. Her four year old daughter plays quietly in front of the TV. In the midst of this calm, homey scene, Smith is on edge and wary. She's been kicked out of two homes by foreclosure, through no fault of her own. Smith is a single mother of four and qualifies for Section 8 vouchers. The federal program provides rent aid for very low-income families. "I had to move. I just had to find something. There basically wasn't too much time to really pick or to look, look. So I just looked and picked what was close by so I could easily transfer stuff quickly," she says. Smith's landlord, Marian Flowers of Huntersville let three houses go into foreclosure last April, August and November. She says she bought the homes just before she retired with the hopes they'd be a good source of retirement income. But Flowers says they required too much time and money, so she gave up. "Shoot! I was about to go under. I said, I've got to get out of this some kind of way. Or else I'm gonna lose everything I got here," says Flowers. Her tenant, Clover Smith lost the roof over her head and the security deposit that could have come in handy for a next home. Smith called Legal Aid for help. She spoke with housing paralegal Nicholas Holt. Holt says he's spoken to about a dozen or so renters who've been in the same situation. "It's upsetting to talk to people who have dutifully paid their rent with the understanding that the rent's going toward the mortgage of these properties. Then out of the blue, you're pretty much told you're going to be homeless pretty soon," says Holt. A two year old state law says certain single unit renters are supposed to be alerted of a foreclosure well before mortgage lenders take over the house. Still, Holt says he hears from frantic renters taken by surprise. Renters relate tales of getting notices that their landlord's property is in danger of foreclosure. Holt warns renters if their landlord loses the house, they could find themselves with just 10 days to leave before the house is padlocked. He explains, "Then all I can do is explain to you your rights regarding any belongings you leave behind after the padlock and give you a little guidance about the best way to deal with those belongings. And that's it." Anthony Chatman called Holt's office too. He was helping his parents pay $895 a month on a lease to own home in east Charlotte, that ended up in foreclosure. Chatman says, "The way we had it set up that part of our payments would go toward the down payment of the house. So pretty much we lost almost a year's worth of payments to purchase the house." This, plus partial payment on a badly needed air conditioning system set Chatman back about $5,000. Chatman's landlord, Tony Termini, let at least four rental properties go to foreclosure, then filed for bankruptcy in March. Because of the filing, those foreclosure proceedings are now on hold. Yet, Chatman says Termini is still demanding full payment for the air conditioner. We caught up with Termini at his spacious home on a secluded street in Huntersville but he refused to speak on tape. However, he did say "It's not my fault." It's hard to tell just how many tenants are evicted when the house they're renting goes into foreclosure. The Mecklenburg County Sheriff's office doesn't distinguish between owner-occupied and investor-owned houses. But some anecdotal evidence can be cobbled together. "We have had several individuals that come in to seek assistance with moving because their landlords have been foreclosed. We actually see at least one to two cases a week," says Elizabeth Maynard with Crisis Assistance Ministry in Charlotte. The agency is on the frontlines of the economic downturn in its efforts to cover emergency rent and utility payments. The foreclosed home listing service RealtyTrac estimates in North Carolina last month, 21 percent of homes that went into foreclosure were rental properties. Nationally, it was 30 percent. The foreclosure problem isn't expected to go away any time soon. The Center for Responsible Lending projects over the next four years the number of foreclosures nationally will reach 8.1 million.