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Tuesday, November 1, 2011
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16 comments:
cheryl
sounds like your contract is unconscionable.
Tell BofA to Fuck off and sue.
Dare them to sue to make a tenant homeless.
pat,
It's not unconscionable. The bank is agreeing to a short sale and to release the seller from a six-figure deficiency. Me sue BOA? I don't have a burning desire to flush a hundred grand or so in legal fee's down the toilet. These restrictions are a necessary response to the fraud going on. It's unfortunate that it is so broad but it would take countless bank hours to separate legitimate arms-length transactions from the rest. I don't have time now to detail the types of fraud occuring in shorts and reo's but the cost to the banks (the public?) is staggering.
Have him find someone else unrelated to sign the lease.
renter,
Earlier I had considered signing a lease with his girlfriend but the end is the same - he cannot stay there. I looked at this angle and it would still be violative of the addendum (and perhaps more fraudulent in it's deceptive intent).
Cheryl,
It's unconscionsable.
The Bank is demanding a family be made homeless, by fiat.
While i agree it's 100K for a lawsuit,
it's about $50 to get a reporter down on the story.
The bankers hate bad press, and this is bad press.
You know it's unconscionable because it's making you crazy, and you are no bleeding heart liberal.
If it weren't unconscionable, it wouldn't bother so many people.
This contract contravenes public policy.
I have a hard time believing that there's no chance that he won't find a rental. I've known plenty of people in his situation in the last few years, and they have all been able to choose the rental they desired.
If he can pay rent, I really think he can find a rental.
"pat said...
Cheryl,
It's unconscionsable."
No pat. Its not. Its nowhere near what would constitute an "unconscionable" contract. Given these facts, it violates your sense of whats right and whats wrong, but your sense of right and wrong does not an unconsionable contract make.
To follow up on what VAI said, it looks to be basically a bright line rule that if anything is most of the time in line with public policy.
Unfortunately, bright line rules are just that. 90-95 percent of the time, it sucessfully separates the good guys from the bad guys, no fuss, no muss.
However, 5% of the time, it sucks in the good guys and screws them, and lets go the bad guys go scott free. Its efficient. Its ruthless. And thats just the way it goes.
As an aside, I find it amusing you are telling VAI, a law school grad what is and what is not an "unconscionable" contract. I understand that you are going to law school soon? If I may, I really really suggest that you learn to keep your emotions in check when developing your arguments in the next few years.
I say this because many of the things you have argued here in the past will get you torn to shreds by some of your professors. They have little patience for the emotional, non-logic based arguments that use buzzwords and hyperbole. Especially when they are used as filler in an attempt to avoid facts uncomfortable to your case (not the situaiton here, but I think you know what I mean)...
For example, you may think you score points here by saying things like "The Bank is demanding a family be made homeless, by fiat", but that wont fly with your professors. Logical thinkers like Harriet had no problem spotting the gaping holes in your emotion filled argument. I suspect many here are the same way.
In fact, I would go so far as to say in certain situations certain professors, judges, etc, would be less likely to agree with your arguments because you are wasting time getting people worked up on things immaterial to the heart of the matter.
Dont get me wrong, that very well could play with juries in family law and tort cases, (provided the judges dont sanction them first:). I know alot of attorneys who make their living using hyperbolic language like "taking bread from a babies mouth" but by and large, that wont gain you any favor with judges or other counsel.
Also, while I do often like to give you the "business", that is not the point of my comment here. If anything, take this as a bit of constructive criticism from someone who has been through what you are soon undertaking. In this respect, I really do wish you the best of luck...
Put the house in a trust then rent back to him :-)
Harriet,
You are correct to a certain degree. I am one of those LL's who will actually consider what lead to the bad credit, etc. Many LL's have strict criteria (fico, credit, etc.) and go no further in rejecting applicants. We have strong demand.
In the situation at hand, the guy has no job. This would be a killer for 99%+ LL's imo.
I am seriously considering a new tenant that is in the short process. This person has a ten yr history at the same job and has the income to qualify ( I will go up to 35%+ depending on other expenses).
anon,
I believe pat is taking Contracts now.
"anon,
I believe pat is taking Contracts now.
11/3/11 8:57 AM"
LOL - you are probably right. Takes me back to my 1L days when we all flexed our newfound "legal muscle" by relating what we learned in class to out of class situations.
The real test will be what happens when he takes property law. I cant wait for the day I see the words "rule in Shelly's Case" or "Fee Simple, subject to a condition subsequent" on this blog :)
Also, going back to the issue of your guy, my gut tells me that in a perfect world, depending upon the county & judge he could probably get some sort of declaratory relief.
He would almost certainly be unopposed. The bank really doesnt care what happens post closing so long as they get their short sale proceeds and they are absolved of any further liability. Any sort of enforcement authority would put up a paper defense at best.
Even if per the terms of that law the courts declaration was still technically invalid, its a circuit court ruling -- who would oppose it? No one would mount an appeal, and no way a higher court takes it sua sponte.
Now, granted, it would probably cost him 20K in legal fees, and certainly no guarantee he would prevail. And if I were him, I would not sink nearly a years worth of rent in legal fees just to avoid the disruption of moving (and no guarantee I would win). Still, in a theoretical sense, its interesting to see what would need to happen to get the so called perfect outcome.
I don't think so anon. There is consideration for this contract. Virginia is a recourse state.
Many indictments (and jail time) have occured. Of course these relate to obvious, provable fraud. If the bank addendum states the the short seller cannot, under any circumstance, continue to reside in the property, I believe this is fully enforceable. Any lying to a lender is bank fraud. I think this guy would get nowhere. I'm certainly not touching it. I signed that addendum (not reading it beforehand - as a lawyer, never have yourself as a client (-:
"VAI said...If the bank addendum states the the short seller cannot, under any circumstance, continue to reside in the property, I believe this is fully enforceable."
Understood VAI. Remember though, I was talking about declaratory relief here.
I dont recall if you ever practiced or not, but as a refresher, a declaratory judgment is an order, signed by a judge, saying (in sum)
"I dont give a sh*t what that law says. I (the judge) say, this is not a cause of fraud. This guy gets to stay and pay fair market rent, and if you (the bank or whoever) tries to throw him out, you are violating my order, and I may put your ass in jail for contempt of court"
These sorts of orders are rare, but they happen. And as you can imagine, once you have one of these pieces of paper in your hand, it pretty much gives you carte blanche to do what you want, the law be damned. I mean, no one wants to go to jail for violating the judges orders right?
So again, in this case, even when the judge's orders would certainly be overturned on appeal, no one cares enough to actually file an appeal. It absolves you, the bank, the settlement company, etc of liability, and actually it puts you at risk (show cause order and contempt of court) if you dont do what the order says. In sum everyone lets it go on a wink and a nod because it was the right end result.
Again, if I were you, there is no way I would get involved. It doesnt help you, and possibly could delay your settlement. But if I (as in I personally) was this guy, with this fact pattern, and was hellbent on staying, id like to think I had a better than 50 50 shot of getting a judge to issue declaratory relief.
Yes, anon, I have not practiced in over 20yrs and never was a litigator (during my 5yrs of practice!).
I don't know what a judge would do. It seems a heckuva deal to get released from a 6 figure deficiency and avoid a foreclosure..but who knows.
Do you know that lenders have restrictions on flips as well? Most won't allow the investor to sell until 90 days have passed. This is designed to prevent the back-to-back closings that were happening (sometimes involving double-dealing by the agents involved). Some banks are now requiring listing agents to accept contracts for a week or so before any are submitted. Lots of unethical stuff has gone on.
cheryl
banks complaingin about ethics, is a laugh.
Bankers are the most unethical trade out there.
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