When Nick and Jessica Dodds returned home to Dunsmuir after their wedding in early August the last thing they expected was to find a notice posted on their door saying they would soon need to vacate the property.
The couple and their three young children – four year-old Preston, who has type 1 diabetes; one year-old Brooke, who must remain on oxygen as a result of a three-month premature birth; and four-month-old Jocelyn – had been living at the residence for the past year. They hadn’t fallen behind on their rent or bills. The only mistake they made was to enter into a lease agreement with a landlord who fell into foreclosure.
“We didn’t see this coming at all; we didn’t even know this could happen,” said 23 year-old homemaker Jessica. “We were totally left in the dark, thinking the owner always took care of his financial obligations.”
The owner, a Portland, Ore. man, had stopped paying the mortgage on the house, all the while still collecting rent monies from the Dodds, according to 25 year-old Nick, who works as a private handyman.
“It sounds like he (the owner) skipped town, we think to Brazil, where his wife has a house,” Nick said. “Nobody has been able to contact him – not the bank, not us… no one.”
He added that the couple believes the $1,500 deposit they paid to the owner upon moving in is long gone. “We probably paid for his plane ticket.”
Story’s like these are becoming more common as renters are increasingly becoming victims of the nation’s mortgage meltdown through no fault of their own, experts say.
“We know it’s a growing problem,” said Rick Sharga, vice president of marketing for RealtyTrac, a company that tracks foreclosures across the country.
“It really is a frightening issue for tenants that have no way of knowing until almost the last minute that a landlord is defaulting on a property.”
Sharga said that more than 38 percent of properties in foreclosure through the end of April were classified as “not-owner occupied,” meaning they were second homes, investment homes or rental property. That’s roughly 280,000 of the nation’s 720,000 foreclosed properties.
The hardest-hit areas are California, Arizona, Nevada and Florida.
More than 38 percent of the 720,000 properties in foreclosure at the end of April were not occupied by the owner, but were a mix of second homes, realty investments and rental properties, according to RealtyTrac’s latest available statistics.
The Dodds’ had been asked to be out of their home within 30 days of the notice, which was posted on Aug. 11, according to Luann Weigele of Mount Shasta-based Ayer Properties Inc., which was hired to handle the case by foreclosing bank Washington Mutual.
Weigele said that before the recent housing crisis, in her four years with Ayer Properties, she can remember only one case where a rental was foreclosed on.
“There has been a lot more since the housing crisis,” she said. “Since the crisis hit I’ve dealt with four foreclosure cases involving renters; as far as I know it’s never been to this extent.”
The number of households to receive foreclosure notices for the first quarter of 2008 was up 112 percent from the same time last year, according to RealtyTrac.
Due to the special needs of Preston and Jocelyn, the Dodds were in constant fear that Child Protective Services might intervene and split the family up if they couldn’t find a new home. It had been difficult when the low-income family was looking for an affordable rental a year ago, Jessica said.
“The people who are foreclosing the house don’t look at the big picture,” she said. “The higher powers don’t care about us; they just want to get their money. It feels like we’re looked down upon because of our low level of income.”
Foreclosure laws are governed state by state, and there is not much renters can do when their landlords get foreclosed on. There is no guarantee of being allowed to stay in the homes or ways to get their security deposits back, according to Bob Boston, a practicing real estate attorney for the greater Mt. Shasta area.
“There is very little in the way of protections for tenants... it’s a sad but common situation,” Boston said. “Many times, the tenants don’t even know their homes are being foreclosed. It’s really unfortunate; bad things happen to good people every day.”
In addition to their financial loss, the newlyweds were forced to cancel their honeymoon plans and reservations in order to secure a new home for their family.
“It was just terrible, that was a time we were supposed to enjoy and have fun,” said Jessica. “But because of this we didn’t get to have our honeymoon to the redwoods; we had to cancel all kinds of plans.
“The whole process was extremely stressful and frustrating, it felt like we had to pay for the landlord’s screw-ups.”
After receiving the notice of foreclosure the couple immediately began searching for a new place to live but were unable to find anything affordable in Dunsmuir. They have, however, since found a rental trailer in Lake Shastina that they’ll be moving into shortly, according to Nick.
“Well, it’s going to be pretty hard because we don’t have a vehicle and most of my work is in Dunsmuir,” he said. “I may be relying on the bus for a while, but once we move I’ll start trying to figure something out.”
Despite all the hardships the couple has dealt with through the foreclosure process they feel that overall it was a good learning experience and say they are being more careful with future rental agreements.
“We’re definitely going to be doing background checks as much as we can; and we’re much more skeptical of people,” said Jessica.
“I really wonder why we had to go through this, it was such a hard blow,” Nick added. “We were so worried and stressed, easily set off. But through prayer, hope and each other we were able to make it through.
“When people hear about all that has happened they often ask how we can handle so much; we tell them it’s like second nature, we just do it.”