DONNA BROOKS
‘Generous’ landlords
Joseph Barnwell was surprised to get a call from a real estate agent in early June telling him that his new landlord wanted to evict him.
Barnwell, who lives in a Dorchester apartment with his wife and three young children, didn’t even know the property had changed hands. He later discovered the property at the corner of Blue Hill Avenue and Brunswick Street that he had been living in since last November had been foreclosed on. Now Barnwell doesn’t know if he will be forced to move.
“I’d like a chance to remain here. It’s close to everything we do in the area,” said Barnwell, noting that the apartment is near his job and along a bus route.
Tenant advocates are trying to help Barnwell, who they say is part of a growing group of renters being displaced by lenders who have foreclosed on properties.
Housing attorneys say they’ve seen an explosion of evictions that can be traced to foreclosures. The evictions are emerging as foreclosure activity statewide has surged.
“It’s a huge issue. I would say in many ways, at least in Boston, the wave of foreclosures has had a larger effect on tenants than homeowners,” said David Grossman, director of the Harvard Legal Aid Bureau.
Lenders filed 12,945 petitions to foreclose in Massachusetts during the first half of the year, up 66 percent from the same period in 2006. While much attention has focused on helping struggling homeowners, tenants living in foreclosed properties have been overlooked, according to tenant advocates.
Advocates want to protect tenants from evictions, and they want lenders to negotiate with nonprofit groups willing to purchase the properties.
A Senate bill passed last month to combat foreclosures and mortgage fraud includes a section that requires new owners of foreclosed property to recognize existing tenants. Tenancies typically continue when homes are sold or refinanced, but with foreclosures it’s a little less clear. So the bill seeks to apply the same tenant protections to renters living in foreclosed properties. The bill is before the House.
Judith Liben, a housing attorney with the Massachusetts Law Reform Institute, said the legislation doesn’t prevent a new owner of a foreclosed property from seeking an eviction. It simply reminds them that they have to treat tenants just as landlords are required to, she said.
“We’re hoping that there can be some solution in which it is clear to the lender or purchaser at foreclosure that the folks that live in these buildings are indeed tenants and they have to treat them as such – that they have to provide the basic services required,” Liben said.
Grossman and other attorneys said lenders that foreclose on properties want them vacant in order to sell them.
A Sudden Explosion
Housing courts generally don’t track evictions initiated by lenders who’ve foreclosed on properties. Clerks from housing courts in Massachusetts, however, say they have noticed an increase in evictions that can be traced to foreclosures.
“It appears that the evictions based upon foreclosures are up around 55 percent from 2006,” said Robert Lewis, clerk of the Boston Housing Court. “In 2006, it appears that we had a lot of Â… single-family homeowners who were evicted. It seems that now we’re beginning to get more multifamily [situations] where the tenants are being evicted because the property was foreclosed upon.”
Rafael Mares, an attorney with the WilmerHale Legal Services Center of Harvard Law School, estimates he sees 10 to 15 eviction cases each week in the Boston Housing Court involving tenants in foreclosed on properties.
“For a 10-year period, we didn’t see any cases and then it suddenly exploded,” said Mares, who is representing Barnwell.
Mares said tenants usually don’t even know the property has gone through foreclosure. Instead, tenants receive a letter from the lender or the lender’s real estate agent after the foreclosure telling them they have to move out.
The lenders typically offer the renter $500 to $1,500 to move out within a short amount of time, sometimes within weeks.
Usually, tenants think they have no other option because the notices seem so official and they end up moving, according to Mares.
But Mares said tenants can wait and try to negotiate with the new owner or force the new owner to file an eviction case.
“Every bank that we’ve dealt with in this context has a mantra that you need to empty the building before you can list the property,” said Mares.
Donna Brooks, a Leominster-based Realtor who lists foreclosed properties for lenders in Middlesex and Worcester counties, said lenders want empty properties because it’s easier to show them.
“The tenant doesn’t have to let you show the property,” said Brooks.
She also noted that lenders are reluctant to keep tenants when they don’t know about their payment history. “They don’t know if they’re good tenants. They know nothing about them,” she said.
And she said the fact that most lenders are offering some money to tenants is significant.
“They’ve been pretty generous. They don’t have to offer anything,” she said.
Still, Grossman and other advocates say it’s unfair for tenants, who’ve paid their rent on time and done nothing wrong, to be thrown out. They say the few hundred dollars the lenders offer isn’t nearly enough to cover moving expenses, a security deposit and the hassles of finding a new rental.
The foreclosures and evictions are leaving behind a trail of abandoned properties and destabilizing city neighborhoods, said Grossman.
“Legislation alone won’t solve the problem. One way or another, banks have to be pressured to do the right thing, which is not to displace people from neighborhoods as part of the process of collecting on unpaid loans,” he said.
Both Grossman and Mares attended a protest at Deutsche Bank’s Boston offices last week. The protest was organized by City Life/Vida Urbana, a Jamaica Plain-based group that wants Deutsche Bank to stop evictions and to sell foreclosed properties to community-based organizations.
Mares said Deutsche Bank National Trust Co., U.S. Bank National Association and Wells Fargo are among the lenders he frequently sees bringing evictions in the Boston Housing Court.
In a prepared statement issued after the protest, Deutsche Bank maintained that even though it’s listed in legal documents, it does not have an ownership stake in properties and has no say over foreclosures and evictions.
“[Deutsche Bank] National Trust Co. acts as trustee for securitization trusts and, in some cases, as custodian for the mortgage documents. The function of the trustee is largely an administrative one; the trust company has no ownership stake or beneficial interest in the underlying loans of a securitization, nor is it responsible for foreclosures or selling foreclosed property. Such decisions are made by the servicing companies, according to contracts for the different securitization trusts,” the statement said. “Deutsche Bank is currently working to provide City Life with the names of the relevant servicers who are controlling the foreclosure proceedings on the properties in question.”
For Barnwell, the Dorchester resident facing eviction, that’s little comfort. Barnwell, who rents his apartment for $1,500 a month and says he’s never missed a payment, thinks it will be tough to find another home to accommodate his family.
Deutsche Bank National Trust Co. filed a petition to foreclose on 80 Brunswick St., where Barnwell’s apartment is located, Dec. 19 of last year. An auction was scheduled for March 16, according to The Warren Group, Banker & Tradesman’s parent company. The Warren Group collects information from the Massachusetts Land Court.
The property’s mortgage was assigned to Deutsche Bank National Trust Co. on May 29. No foreclosure deed has been filed.
Barnwell is getting help from Mares at the WilmerHale Legal Services Center. The center was able to negotiate with the Boston Water and Sewer Commission to temporarily restore water service after it was cut off when the owner stopped paying the bills. But water service is scheduled to be shut off again in mid-September unless the lender cooperates, according to Mares.
“I don’t understand why we can’t get this resolved in a fair manner that’s beneficial to both parties,” Barnwell said.
