Hi,I took out 2 loans for 2 properties,haven't been able to pay the loans for like a year now,no income.but I`m renting the 2 properties out and getting the rent paid into my account.havent paid that rent money to the bank and used some of it.am I trouble for not paying them the rent money? And should I start paying the rent money for them? Will I be jailed for doing this,is it stealing money from the bank?the houses are been reposses.

Hello p:

The money you receive from YOUR houses belongs to YOU. It's NOT the banks. No, you will NOT be jailed for spending your own money. Whether you pay them or not is a different issue.

When the houses go into foreclosure, I'd certainly give your tenants a heads up. Yes, they'll owe YOU rent up until the day the bank auctions them off. On that date, give them back their security deposits - ALL of it, because you won't have to do any repairs anyway. The new owner may or may not want to rent. If not, they'll be given 30 days notice to vacate.

excon

Excon is correct, except in the state of California. If you are in CA, you MAY be subject to a lawsuit by your tenants.

Have you thought of asking the tenants if they want to buy the houses? You may be able to work with the bank to transfer the loans to them. At least this keeps you from going through a foreclosure.

The bank wants to know who`s getting paid the rent money now,so they going to see I`m getting it paid,what will they do now,now that they know I`m getting rent money from the houses and haven't paid them the money.is it my money or will they say it's their money,what will happen?

Its your money, but you still owe them. If they feel you are taking money out of the property and not paying them, they will probably try to speed up the foreclosure process. When the properties are foreclosed on, and sold at auction they will still go after you for the balance (if any). But they can't put you in jail.

Another person on Yahoo answer website told me its fraud what I`m doing and they will lock me up,is this true?

Hello again, p:

We're not going to change our minds. I don't know about the yahoo's on Yahoo, but both Scott and myself have answered 10's of THOUSANDS of questions here about the law... If we were simply guessing or making it up, don't you think somebody would have stopped us by now?

excon

I appreciate the answers,you guys know what you talking about,because many other people told me what you guys told me,I don't think that person that told me its fraud knows what his talking about.thanks guys.

Are you in California? If not, go back to that Yahoo Yahoo and ask him to cite whatever law that would suggest you are committing fraud. As far as I know, other than CA, there is no law against what you are doing. There is no law that forces you to apply rental income towards mortgage payments. The consequences of not paying your mortgage are foreclosure and loss of the property.

If you need to the rental income to keep a roof over your head and food on the table, that money is yours to do as you wish. Ethically, however, if you are just pocketing the money until you lose the properties and you do not need the rental income to live, then doing so is not a nice thing. But its not illegal in most places.

OK,thanks Scott.really stopped me stressing now,I don't have a job or income at all,I have nothing at the moment so that's why I take the rent money to live.

another thing I want to find out is.they going to reposses the properties,then they going to try and get the money that I owe them back but the thing is I`m unemployed,have no car or anything,living with my dad,his retired,so have no house myself,basically I have nothing,just my clothes and that's it,nothing valuebles or any savings.what will they do to get the money back?

Most likely they will get a judgment against you. If you have no assets now, they will keep the judgment on file (generally its for a 7-10 yr term with the option to renew at least once). If you ever do get a job etc. they will use the judgment to attach assets or income.

OK,I understand now.thank you

Do you think I should file for bankruptcy or is that not the right thing to do?

Hello again, p:

You ARE, in effect, bankrupt. The law was designed for people like you. If you don't file, you'll have a HUGE judgment or TWO hanging around your neck for 10, and maybe 20 YEARS. Every time you open a bank account, they'll empty it. Every time you get a job, they'll garnish your wages... Every time you buy a car, they might grab it, (although probably not, but the key is, they CAN).

Or, you can do the right thing, and pay the banks back. I don't know. What do YOU want to do?

excon

The thing is its a lot of money and I know I won't be able to pay it back in my hole life time.so I have no idea what to do.