Leila Navidi

Wyant puts a sticker on the door of a foreclosed home while executing evictions. Some renters in the Las Vegas Valley have been forced to move from more than one home in recent years because of foreclosures.

By Abigail Goldman (contact)

Sun, Jul 27, 2008 (2 a.m.)

Leila Navidi

Deputy Constable Robert Wyant says he and his colleagues sometimes find empty houses when serving eviction notices, but they have also encountered angry people.

The six senior citizens were strung to IV drips in a Henderson home converted into a geriatric care facility.

The hospice home, a big stucco beast, was leased. The tenants, a couple who cared for the aging adults, never missed a rent payment. The owner of the house, however, was hardly so diligent. He lived outside the state and beyond his means. He stopped paying the mortgage and never said a word.

Hello, foreclosure.

Henderson deputy constables went to the home in March 2007 with a judge’s order: Everybody out. Even the seniors sinking into their sheets had to clear out — within 24 hours. The bank wanted its house back, like, now. This was the first anybody in the home had heard of the foreclosure.

Ambulances were called to transport the elderly evictees. Temporary housing had to be hustled up overnight. Last-minute medical specialists had to be hired.

The whole thing made your stomach turn, Henderson Constable Deputy Director Stephen Kilgore said.

It’s one of the more extreme examples, but short-notice, surprise renter evictions — many of which involve orders to vacate within three days — have become increasingly common in the Las Vegas Valley during the past year. Lots of people are trying to come up with solutions, ways to lessen the pain or at least a more reasonable system, but it’s likely to get worse before it gets better.

Consider the numbers:

• Half of Nevada’s 18,220 home foreclosures from October 2007 to January had mailing addresses that didn’t match those of the foreclosed properties — an indication they were rentals, according to RealtyTrac.com.

• The state had the country’s highest foreclosure rate in the first quarter of 2008, almost four times the national average. Las Vegas, meanwhile, had the third-highest foreclosure rate for metropolitan areas — one in every 44 households.

• An average of 43 houses were foreclosed every day in June in the Las Vegas Valley, according to research company Applied Analysis.

Now connect the dots: Approximately one quarter of houses in the valley are leased.

Renters, the very people who shouldn’t have to worry about mortgages, are being blindsided and bruised by the mortgage crisis. This is because of a glitch in the system, flaws in the foreclosure process that stack up and topple, sending surprise evictions into motion and renters onto the street.

Tenant advocates, constables, politicians and bankers all say minor changes to the law might make big improvements.

The Legislative Commission Subcommittee on Mortgage Lending and Housing, a group researching legislation to protect renters, is planning to draft legislation that would make it a felony for homeowners to hide looming foreclosures from renters.

“We are very serious about prosecuting this type of activity as fraud,” said subcommittee member Sen. Warren Hardy, R-Las Vegas. “You will see us come down really hard on that.”

But such a change can’t be made until the next legislative session, eight months away.

Meanwhile, renters continue to be uprooted, punished for another person’s problems.

•••

So how did renters get dragged into it?

First, homeowners who rent their properties don’t have to tell tenants about impending foreclosures.

Second, banks mail mortgage default letters only to the address homeowners provide, meaning if your landlord lives in California, she has been getting notices for months, but nobody has sent a single letter to the home in foreclosure.

Third, the lender that ultimately inherits the home isn’t aware there are renters, or doesn’t care, and seizes the house as if it’s occupied by a homeowner who knows better. Everybody out — the bank doesn’t want to be your landlord.

But the really insidious stuff starts three to six months before a foreclosure is finalized, when the homeowner knows he’s not paying the mortgage, knows he’s losing the house — and still collects rent as if nothing’s wrong. On June 2, members of the Subcommittee on Mortgage Lending heard testimony from Deputy Director Kilgore, who shared the geriatric home horror story.

There are also plenty of valley renters who have been hustled from home to home.

Tresia Chesley, 44, was booted from three houses in 2 1/2 years. She moved to North Las Vegas in November 2005. She spent 19 months in her first house before the constables came knocking.

She moved to another house, and nine months later, the bank foreclosed on the property.

Chesley did a background check on the owner of the next house she rented. He swore his finances were in order. She moved in on April 1 and found a mortgage default notice in the mail 10 days later.

This is often the only hint a renter gets — bank letters get back to the house, or bankruptcy attorneys send junk mail.

Nevada Legal Services has helped Chesley and a number of other Clark County residents in the same situation. Three years ago, managing attorney James Vilt got maybe one of these cases a week. These days, he gets about 45.

Vilt gives everybody the same mix of good and bad news: You have more time than you think, but not much. Renters can request a court hearing, which will take about three weeks to schedule and will result in a judge’s telling them to move out. It’s a stalling tactic. Suing is fruitless because the homeowner probably can’t pay up.

“People are stuck with a system that’s flawed,” Vilt said. “A lot of people freak out and leave. They pack up their stuff. They panic.”

•••

Here’s the magic solution, maybe: Post foreclosure notices at the actual home. Have a constable come by and nail it to the door, not three days before the foreclosure, but 90 days before, or more. Simple enough, and agreeable to multiple members of the Subcommittee on Mortgage Lending and Housing. Even the bank lobbyists, who acknowledge the cost to post the notice would come out of the banks’ pockets, are OK with a warning, if only because it might dissuade an angry tenant from, say, arson or some rage-inspired variation.

But there are other, more complicated variables to be considered, such as whether a homeowner who quietly collects the rent is committing a criminal act, said Assemblyman Marcus Conklin, chairman of the subcommittee.

Then there are questions of just how much time a renter is entitled to. Some think that even if a renter gets 90 days’ notice, he should still get more than three days to move when the foreclosure is final. Not everyone agrees.

Banks are willing to give more notice, but once that letter is posted, people should start making plans, said Bill Uffelman, president and chief executive of the Nevada Bankers Association. Bankers don’t want to be saddled with a property they can sell — not that anyone’s buying.

Then there’s talk of giving renters more access to their landlord’s financial status. It would be nice for a tenant like Chesley, who’s not the only person in Clark County with a kicked-out-three-times story. But opening up those financial records might be a breach of privacy rights, Uffelman said.

Moreover, even more basic issues have yet to be addressed. For example: What if a landlord tells his tenant the house is being foreclosed on, but holds that tenant to his lease? This presents a whole new set of laws to be explored. Can’t someone create a legal clause that allows renters who are foreclosed on to break their leases, and get their deposits back, no questions asked?

The answer is hardly satisfying: Stay tuned until February, when the Legislature is in session.

“The problem is that we meet once every other year,” Conklin said. “No one could possibly have foreseen the depth of this problem in advance, although it certainly feels like somebody should have.”