Fear and uncertainty filled Daniella Baca after she learned that her landlord was facing foreclosure. Those feelings peaked the day the home was sold, when the single mother of two received what seemed like an official letter offering help and then a warning in capital letters: “If you do nothing, you are risking an eviction within 15 to 30 days.”

“It was scary, especially when I saw the (foreclosure) summons even though my name wasn’t on it,” said Baca, 42.

Baca is among the many renters in San Diego County and other areas hit hard by foreclosures who have been targeted with similar panic-inducing fliers. Former homeowners of foreclosures get them, too. What’s more concerning than the doom-and-gloom messages is the erroneous information in the ads, said Steven Kellman, who deals with such issues often at San Diego’s Tenants Legal Center, which he founded. (Kellman also is a member of the U-T San Diego’s Rental Roundtable.)

“They’re filled with misinterpretation,” said Kellman, who said the fliers started popping up about two years ago.

So what are the rights of renters and homeowners living in properties that have been freshly foreclosed upon?

Here are five myths busted:

Myth: The eviction process, also known as unlawful detainer, begins immediately after the foreclosure property has been sold or will be sold at auction.

Fact: Unlawful detainer doesn’t start until your move-out notice expires, Kellman said. If you’re a renter, you’re entitled to at least 90 days in the home or the remainder of your lease, as long as your lease is deemed bona fide as defined by federal law. If you’re the former owner of the home, then you’re entitled to a three-day notice after the foreclosure sale.

Myth: If you pay a company for its post-foreclosure services, they can guarantee you can stay in the home for up to five to nine months.

Fact: There’s nothing in the California law that says that. Again, if you’re a renter, you get a minimum of 90 days, or the remaining time on your lease. It’s three days if you’re the former homeowner.

Myth: You don’t have to pay any rent after a home has been foreclosed upon.

Fact: Neither state nor federal law specifically allow you to stay in a foreclosure property rent-free. But there are banks who are willing to strike deals with homeowners and renters. If you stay in the home for the duration of what’s left on your lease, then the bank steps in as the landlord, and you may have to pay the bank the lease rent. The bank may offer you “cash for keys” to pay you to move, but “one must tread carefully,” Kellman said. “These are filled with conditions.”

Myth: Homeowners and renters who get post-foreclosure solicitations should act on them immediately and start legal processes.

Fact: You should wait until the new owner of the foreclosure contacts you or serves you with papers, Kellman said.

Myth: Any company that produces post-foreclosure paperwork that looks official is licensed to practice law.

Fact: A lot of these companies who say they can negotiate a deal for you with the banks do not have law licenses. How can you find out for sure? The State Bar of California has an attorney look-up site here. Does the company claim to be a real estate office? You can look that up as well, at the Department of Real Estate site here.

Please note: Giving legal advice, preparing legal papers or responding to legal papers should only be done by an attorney who is licensed to practice law and is experienced on matters relating to foreclosures.

Frank Washburn, whose Chula Vista home was foreclosed upon, never saw the red flags. He admits to being duped by one of these post-foreclosure solicitors. His failure to do his homework, he said, cost him $2,500.

Washburn, 45, remembers a man approaching him at his former home to guarantee him more time at his property until he found another place. After Washburn made an initial payment, he was taken to an office to meet a legal assistant. In total, Washburn paid $2,500 to the initial company but was never given any services. His home was foreclosed upon in August. “They play off your hope,” said Washburn, who did not report the incident to any agencies. “You’re wishing for the best.”

Eventually, Washburn found help with the Tenants Legal Center, a company that helped him strike a deal with the bank. The options were stay in the home another 30 days, which gave Washburn no money, or move out within a week and get $1,000. Washburn, who chose the latter, paid the legal center $1,500 for its services.

So, are post-foreclosure solicitors illegal?

That depends on a number of factors, said Kellman, of the Tenants Legal Center in San Diego.

Such companies are illegal if they’re not registered as a business. One way to verify that is by searching the county’s fictitious business name database here. It’s also illegal for companies to offer legal services when they’re not licensed to do so. The same goes for real estate offices that are not registered with the Department of Real Estate. To file a complaint against a company, you can try the Better Business Bureau here.

Other options include emailing the San Diego County District Attorney’s Office at REForm@sdcda.org, or calling the San Diego City Attorney’s office at (619) 533-5600.

By Lily Leung

Friday, February 10, 2012