AND THEN THEY WONDER WHY THE FORECLOSURE RATE IN MA IS SO HIGH
I recently applied for a loan with a MA bank. I was approved. I paid $500 and did the appraisal for one of my 3-family buildings and then I was given the contracts to sign by the bank – all 43 pages of them.
It took me 2 days to read them and I asked for certain things to be changed. The bank refused to negotiate at all and sent me a denial letter for “refusing to sign the loan documents” as is.
Fine, I don’t need their money that badly but what happened raises the question about Bank Contracts and what Banks should be allowed to ask and do and what should simply be declared Void and Against Public Policy.
I wrote a complaint to the Attorney General and here is what they said: “The MA Division of Banks is the agency with oversight of this matter”
I wrote to the Div of Banks and they washed their hands too: “Our role is limited to intervention in disputes filed by the consumer. A “consumer” is defined as a person who purchases goods or services or borrows money for “personal, family, or household use”.” They also said that the we, the Landlords of MA, are businesses and are “deemed to be otherwise adequately protected”. Yeah, right!
I wrote to our Legislators – 200 of them. No one replied back!
So there you have it. The sorry state of affairs in MA where no one cares about landlords and no one seems to understand that when landlords are foreclosed upon or lose their business the number of tenants who lose their home because of that is much higher.
It is funny to me how people are bashing their heads against the wall publicly asking what caused this Housing Depression when the letters that I mentioned above clearly show why we have so many foreclosures.
The answer is no one cares about us – the small property owners in MA. No one is there to defend us. We need to organize and do it ourselves.
By the way if you are wondering what I want to be made illegal, void and against public policy, here it is. In their 43 pages this bank demanded that I agree to the following:
They offered me a choice of only 2 Appraisers. It should be illegal for any bank to offer less than 10 randomly chosen independent Appraisers. Actually we should be allowed to choose our own appraisers from the Yellow Pages. We pay for them anyway.
It should be illegal to pay for the appraisal before we have seen the Contacts and we are OK with them.
It should be made illegal for any paperwork to be presented if it is less than 14 size font and less than 1.5 line spacing. Currently is is so small and crowded that it is impossible to read by the average American.
This bank had listed 16 different ways for us to be found in default beyond not having our mortgage payments on-time. There was even language that all it takes for the lender to call the loan is to “deem itself insecure” and they can start taking away your property.
Here are some of the ways that banks in MA are allowed by our legislators to foreclose on you according to their contracts:
– if any other creditor makes a demand for payment from you
– if a receiver is appointed even temporarily for any of your buildings
– if you merge with another business or another person (can’t one marry without risking being in default?)
– if you fail on any condition or any covenant in the 43 pages of fine print
– if any of your other buildings is foreclosed upon
– if you fail to furnish your financial documents “promptly”
– if you attempt to sell or refinance this or any other building
– if any of your tenants insomuch as even threaten a lawsuit against you
– if there is a lawsuit or counterclaims against you
– if there is any judgment against you
– if there is any lien against you or even if the Lender is served with papers that someone would be filing a lien
– if one of your other buildings burns down or is involved in other catastrophic event
– if you get cancer, for example, or “any other change in your condition or affairs” and so on and so on
Keep in mind that these are to be considered Events of Default even if you continue paying your mortgage on time! And also keep in mind that they are demanding in their contracts that the Consumer waives their right to appeal, and their right to receive written notices or any notice at all and even the right to a protest to any unilateral decision by the Bank to declare them in Default.
After they take your building using the above listed many different ways then they don’t have to wait until it sells for its real market value but they can sell it for a fraction of its value and then go after your other buildings.
That should be illegal and against public policy because it encourages fire-sales and bringing the value of the whole market down. Besides, if banks are allowed, as they currently are, to reach beyond the listed Collateral they decrease their investment risk substantially and that encourages them to make undocumented loans and other poor investment decisions because they know they can always sell quick and then sue you for more. If only one thing can be changed in MA regarding banks this should be it.
This bank demanded that I deposit all tenants Security Deposits with them and even prior to an Event of a Default I relinquish my rights to the security deposits to them. How can we do that when Security Deposit Accounts are supposed to be beyond the reach of our creditors?
They want us to sign that we “cannot modify, extend or terminate any Lease” without their consent. What?
They want us to pay their court judgments and their attorney fees if we sue them or if a third party sues them in relation to these contracts. (What? We are not liability insurance companies and they do not pay us monthly premiums to insure them and indemnify them. They have the option to get insurance like we are required to do.)
By signing this contract I was required to “waive all protections afforded by current law” including the right to a jury. I could only imagine if landlords asked tenants to waive all protections afforded to them by current law like for example, the right to live in a habitable apartment.
OUR LEGISLATORS REFUSE TO MAKE SOME OF THESE THINGS VOID AND AGAINST PUBLIC POLICY…..AND THEN THEY WONDER WHY MA TAX REVENUES ARE LOW. DUH!!!
Call to action: If no one cares about us then we must organize and care for ourselves. The Internet is a great way to do this.
1. Tell other people about this list and ask them to send me an email so I can add them.
2. Comments are welcome. For right now you can simply email back. I am working on my new web site MassachusettsLandlords.com where we, the landlords of MA, will be able to fight back.
3. Contact your legislators and cc me as well.
4. I give my permission for this content to be used by SPOA, MRHA or any of the smaller groups. Share this with your members…