news-record.com

GIBSONVILLE — At least when you rent, you can't lose the roof over your head to a mortgage foreclosure.

Can you?

Well, that's exactly what is happening to almost two dozen tenants who landed what seemed like a good deal on pre-fab rental homes in a new subdivision east of U.S. 29. Within months of moving in, they recently came home to find the notices .

The California-based investor who owns the houses, so new they don't even have grass planted yet, is in foreclosure. The homes will be auctioned off on the courthouse steps in October, and the tenants must move.

"There's nobody to call to get my security deposit back," said Salinda Lash, who lives on Pony Run Drive in the Quarterstone Farms subdivision off Hicone Road. "I've got to find a new place, and I'm left with nothing."

The foreclosures may be one of the first local examples of what housing advocates warned state legislators of during this past session. The byproduct of the sub-prime lending crisis is not just owner-occupied homes going into foreclosure. It's also jeopardizing tenants who rent property that investors bought in hopes of a quick profit — a profit that hasn't materialized.

"It doesn't take a crystal ball to see that a lot of properties are going through foreclosure, and some of those are going to be rental properties," Bill Rowe, general counsel for the Raleigh-based N.C. Justice Center said Friday. "You're calling about the first one, but the way rates are ticking up, there's going to be a lot more."

During this year's legislative session, Rowe and other fair housing advocates lobbied for a new law giving tenants in foreclosed property 30 days' notice, but the law doesn't take effect until Oct. 1. According to Guilford County court records, as many as 21 separate foreclosure orders were delivered to Quarterstone Farms in August and September.

Land records show the foreclosed property is deeded to Burbank, Calif., resident Torrey B. Lawrence of Lawrence Investments. A business number was disconnected, as were the numbers of the leasing agent, A Home America on East Wendover.

Tenants said last week they had repeatedly tried to contact the rental agent for refunds of security deposits of $800 to $900 — with no success.

"It's a mess," said Pony Run Court resident Diane Hunter, who like other tenants paid in cash each month to an agent who came to collect the rent. "I thought it was strange. Then when we got these papers, red flags went up."

The abrupt news of the foreclosures already caused one family to be without housing. Monica Stimpson paid $800 in money orders for a security deposit to A Home America, gave notice to her previous landlord, then found herself and her five children with nowhere to go.

"We moved into my mother's two-bedroom. We were living on top of each other," said Stimpson, who has since scraped up money for another rental home. "With five kids, that $800 was hard to come by."

At the nonprofit Greensboro Housing Coalition, case workers have seen individual tenants foreclosed upon, but not whole streets in subdivisions.

"People thought they were going to buy investment property and make a killing," observed Beth McKee-Huger, coalition director. "They buy what they can't possibly afford. When the cash flow doesn't work, the whole house of cards starts to fall apart."