When her landlord lost the ownership of his property due to foreclosure, Lynn Earley had no idea her world was about to turn upside down.
For nine years, Earley had been living quietly and uneventfully in the same tiny building on First Avenue in North Bergen, located in the backyard of a two-family home. At the tail end of last year, the property was taken over by the residential mortgage company PennyMac.
At first, Earley didn’t see any sign of trouble. Quite the opposite, in fact. PennyMac not only failed to raise Earley’s $775 month-to-month rent, they installed a new roof and front door on the structure, where she lived with her three cats.
Then in April she received the shocking news that her home was “illegal.” According to a notice from PennyMac, the home had been converted decades ago from a shed to a residence illegally. She was instructed to cease paying rent.
“I reached out to Emile Fuda, the community representative for my area here in North Bergen,” said Earley. “He and Mayor Sacco looked up the deed, and yes, my house is listed as a ‘storage shed.’ He told me that the first owner [allegedly] renovated the space illegally, with no permits, and just started renting it.”
“My house is listed as a ‘storage shed.’ He told me that the first owner renovated the space illegally, with no permits, and just started renting it.” –Lynn Earley
Earley asked instead for $5,000 to move out, believing that’s a reasonable figure to help her transition to somewhere else.
PennyMac has since made several counter-offers, up to $4,700 as of Oct. 9. However, the offers are “cash for keys,” meaning Earley receives the funds only after she leaves, not before. They also stipulate that half the money goes directly to her next landlord rather than to her.
“I’m 66, a senior on a fixed income,” said Earley, whose income consists of a monthly Social Security check. “I don’t see how they expect me to move out with no money.”
Five offers rejected
PennyMac was founded in 2008 with the original purpose of purchasing “distressed” mortgage loans, meaning those on which homeowners were unable to continue making payments. The company has since diversified into several offshoots, including direct sales mortgages to new homeowners and purchases of combined mortgage loan packages from other vendors.
They are currently the number four originator of residential mortgages in the U.S., according to Chris Oltmann, SVP of investor and media relations for the company.
The property on which Earley resides is considered REO, or real-estate owned, meaning it is owned by a lender, in this case PennyMac.
“There are two bonafide tenants [in the main house], and the third unit is an illegal unit according to the city,” said Oltmann. “Since it’s not a permitted legal unit we can’t have people living in unpermitted illegal structures on the property.”
Although he didn’t know all the specifics of Earley’s situation, Oltmann was broadly aware of the circumstances and said the company had made her five separate offers, all of which Earley rejected.
“We want to try to do right by the people that are there on the property,” he said.
Monetary offers are made to tenants on a case by case basis, he explained. “It depends on the situation.”
The most recent notice to Earley stated flatly she must vacate the property 90 days from Oct. 27. There was no mention of money.
Oltmann was unable to say what will be the next step if Earley fails to comply, but in most instances she may wind up in landlord-tenant court, with the landlord seeking eviction. If past cases are a guide, the tenant could be entitled to up to six months’ rent for relocation expenses, although it is not automatically granted.
In this case, Earley paid almost nine years of rent to a landlord who then lost the property.
“People have said to me I should sue my former landlord for the $68,000 I paid him since 2006,” said Earley. “But he had a major stroke last August. Almost killed him. He is now living In Nevada, paralyzed on his right side, in a wheelchair. I doubt he has a penny to his name.”
Seeking a new home
Earley was homeless once before, and the possibility of it happening again haunts her. “I wake up in the middle of the night in a panic,” she said.
In 2004 she lost her job and wound up couch surfing for two years. She has suffered from a speech impediment since the 1980s and stress exacerbates both that problem and several other medical conditions, resulting in her being unable to find a new job.
Ultimately she filed for disability, something she was loathe to do, and in 2006 received a check and assistance in finding an apartment – the one in which she is currently living.
“I really like it here,” she said. “I don’t have a car, I live one block from Bergenline. My doctor is there, my dentist is there. I just took the senior bus today. The Police Department is the greatest. The Fire Department’s very good.”
Earley has long been a supporter of arts in the region, having started the North Hudson Creative Alliance and the Creative Kicks Workshop, which brought singer-songwriters to teach kids to craft songs.
A self-described downtown Manhattan party girl from ages 16 to 38, Earley has been sober 28 years and founded the Smart Party (formerly the High and Dry Club) to offer alcohol-free entertainment as an alternative to standard bars and nightclubs.
About her current situation, she said, “I have two problems. The first is I don’t have any money to go anywhere. They’re not giving me any. They’ll give it to me after I move out. To me that’s ridiculous. The second problem is my cats. I have three cats and they’re used to going outside. I need to find the bottom floor of a two-family house.”
She is still hoping to find a new residence somewhere nearby, although finding an affordable apartment for someone on a fixed income is increasingly difficult in this incredibly populated area.
“Senior housing is out of the question,” she said. “I’m not giving up my cats. Why should I have to? I didn’t cause this problem.”
As far as takeaways from this situation, she offers the following: “My advice for any people going to rent an apartment is to check out the space, check out the future landlord, and ask questions about the space. If there’s something weird about it, don’t rent it.”
Anyone who can offer help can contact Earley at firstname.lastname@example.org.
Art Schwartz may be reached at email@example.com.