Apartment renters caught in foreclosure net

Like so many Black homeowners struggling to keep their homes, the foreclosure crisis is also affecting many Black renters.

There were 90,782 foreclosure filings in Illinois last year, a 25 percent increase from 2006, according to RealtyTrac Inc., a California-based real estate company that tracks foreclosure activity in 50 states. Cook County is the largest county in the state with a population of 5.3 million, and it recorded more than 30,000 foreclosures in 2007.

South suburban Alsip is located in Cook County and is where renter Roberta Thurman, 37, lives. She is among the hundreds of renters being affected by the foreclosure crisis.

“They say bad things happen to good people all the time. I guess this is one of those times,” said Thurman, a disabled, single mom whose four-unit apartment building is in foreclosure. “It’s not my fault the landlord fell behind on the mortgage. I did my part. I paid my rent.”

Cook County records show Thurman’s building, at 3622 W. 120th Pl., is in foreclosure. Thurman said she knew something was wrong when, in January, her rent payment was returned by the post office.

“I went by the office after I could not reach the landlord by phone and that’s when I found out the (rental) office was closed,” Thurman told the Defender. “I later found out that the landlord’s (Abe Karn) visa had expired, and he went back to his home country of Egypt.”

Joseph Michelotti Jr., an attorney representing the landlord, said he is trying to get the building in shape to be sold and would prefer the tenants to stay.

“It’s easier to sell a building fully occupied than empty, so why put them out,” Michelotti said. “But my records show the tenants have not paid rent since January, and no potential buyer wants to buy a building owed thousands of dollars in back rent.”

He added that the tenants were told they would be given credit for any utility payments they made, but so far no one has provided any proof.

In February, the water and gas was shut off at the building for non-payment. These services had been covered by the rent. Shortly after that, health department officials from Alsip ordered the tenants to move out within 24 hours.

“They (Village of Alsip) said the building was unsafe because it had no heat, and they were afraid the water pipes would freeze and burst,” Thurman said. “So me and the rest of the tenants got together and decided to take over the bills so we could have somewhere to live.”

Thurman’s situation is not unusual, said John Bartlett, executive director of the Metropolitan Tenants Organization, a non-profit group in Chicago whose clients are mainly poor and Black. Bartlett said MTO received 50 calls just last month from apartment renters facing displacement because their building was in foreclosure.

Normally, MTO would receive about five such calls a month.

“We expect to see more of this as more landlords find themselves in foreclosure,” Bartlett said. “There’s no doubt that the foreclosure crisis is impacting renters who are a part of the community.”

Bartlett added that calls to MTO are coming mostly from renters in Black communities such as Englewood on the South Side and Austin and North Lawndale on the West Side.

In 2007, there were a record 38,467 foreclosure filings in Cook County, which includes Chicago, up from 27,287 in 2006, according to Darlena Williams-Burnett, chief deputy Cook County Recorder of Deeds.

However, Williams-Burnett cautioned that while the majority of those numbers are actual foreclosure filings, there are a few other court related filings such as code violations included. The Recorder of Deeds Office does not record foreclosure filings separately like they do bankruptcy, she said.

And records showing how many foreclosure filings involved for-sale properties, such as homes and condominiums and rental properties such as apartments, were not available at press time.

Jason Lee, 49, was one of those callers MTO heard from last month. For the past 13 years, he has lived at the same six-unit apartment building in Englewood but is now facing displacement because the building is in foreclosure.

“I wish I had of knew before I sent my rent this month that the building was in foreclosure. I never would have sent it in,” he said. “My landlord knew he was going under but still collected my rent, and I do not think that’s fair, especially if he does not plan to refund my security deposit.”

Keith Turner, a Chicago real estate attorney, said a landlord would stop making mortgage payments on an investment property such as an apartment building that is not owner-occupied before they stop paying on their home.

“During these hard, economic times, renters are paying 30 to 35 percent of their monthly income toward rent, making it difficult for landlords to continue raising rents,” he said. “And if a landlord finds himself in a corner, he will risk losing his investment property before his own residence so that may explain why we are seeing more (small) apartment building owners in foreclosure.”

Landlords agree.

“It’s only so high I can raise rent before tenants start to move out,” said Derek Jackson, 55, who owns a four-unit building on the South Side in the Roseland community. In May, there were 204 foreclosure filings in Roseland, according to RealtyTrac Inc. “And if I have to decide between my family having somewhere to live and someone else, you can bet my family will come first.”

Other landlords said rising utility costs and expensive building repairs has caused many landlords to fall behind on the mortgage payments.

“If the furnace goes out in the building, the tenants will not have any heat. If the roof starts to leak, the tenants will have water damage in their unit. These are very costly repairs that must be fixed immediately when they occur,” said Anthony Shannon, 41, who owns a two-unit building in Englewood. “Many small time landlords like me work regular jobs during the day, and like anyone else, if we get laid off it puts us behind in our mortgage payments.”

Timothy Snow, a senior mortgage banker with Bank of America, said renters who know the name of their landlord can call the chancery division of the Clerk of Circuit Court of Cook County at (312) 603-5133 to check if their landlord is being foreclosed on by a lender. To obtain the name of a landlord, renters can call the Cook County Recorder of Deeds’ office at (312) 603-5050.

The Illinois Mortgage Foreclosure Law will allow tenants who are current on their rent an extra 120 days to move out or to live out their lease, whichever is shorter, when their landlord is facing foreclosure.

Additionally, Snow said renters should take the following steps to protect themselves against foreclosure:
*Make sure their rent is current.
*Keep receipts of all rent payments and make payments using a check or money order.
*Have a lease in writing preferably for one year instead of month to month.

Snow adds that it’s always better to have a year-long lease because more time can be allowed for tenants with longer terms. Month to month leases can be cancelled after a 30-day notice is given to the tenant.

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