Section 8 tenant, house in foreclosure, FHA...help!!

[bkinMA1985]

Hey again,

I am panicking right now and am hoping one of you can ease my worries. We have a Section 8 tenant in out multi-family house that was included in our BK, discharged in July 2012. BoA has yet to complete foreclosure process. The housing authority has continued to pay us monthly for the Section 8 tenant. My original understanding was that since the house is still in our name that we can continue to recieve the Section 8 payment (we are after all upkeeping the property, paying water/sewer bills, shoveling etc.) but have not been paying mortgage.

I just read that we will get in big trouble for this since our mortgage is federally-backed (i.e. an FHA loan). Apparently if you have a federally-backed mortgage, you have to use the Section 8 payment to pay for mortgage/house expenses. I can't say that 100% has gone to house as we have had to use money to stay on top of bills/pay off bills so we can be in a good place when we finnaly do have to move. But I can't seem to find any additional information on this. Anyone know? I just want this all to come to an end already. Verge of a nervous breakdown...

[tobee43]

this is such a difficult situation. frankly, i'm not certain what the answer is.

i would call the FHA directly. i know, that may be a bit frightening to do, but at least you will get the correct answer literally fro the horses mouth. ii wish you the best of luck and keep us posted on the progress, i'm sure it will all work out.

[justbroke]

I just read that we will get in big trouble for this since our mortgage is federally-backed (i.e. an FHA loan). Apparently if you have a federally-backed mortgage, you have to use the Section 8 payment to pay for mortgage/house expenses. I can't say that 100% has gone to house as we have had to use money to stay on top of bills/pay off bills so we can be in a good place when we finnaly do have to move. But I can't seem to find any additional information on this. Anyone know? I just want this all to come to an end already. Verge of a nervous breakdown...

Where did you read this? I'm wondering where in the guidelines that appears. it would be interesting.

I would postpone the nervous breakdown.

I am aware of, for example, the Housing Choice Voucher (HCV) program and what the responsibilities are as a landlord (owner). I have never read anything in the HCV program guidelines that match what you posted. I have not seen anything in any of my Mortgage documentation indicating an assignment of rents to any GSE lender. So, I am wondering where this is coming from.

[bkinMA1985]

Justbroke,

I came across it while doing general research. It was some investigative report some town did about landlords scamming by getting section 8 payments on numerous foreclosed homes (not our intention, but I wanted to see what the article said). I can't find the article at the moment, but it mentioned that landlords have no obligation to use section 8 payments for the mortgage etc. unless they have a federally-backed mortgage. It didn't elaborate. I guess I saw that and freaked out. I sent an email to our lawyer to get her take, which will probably be simialr to your original response. I think this whole process has just made me paranoid. The last thing I want to do is "scam" anyone and get into more trouble. After all, BK and foreclosure are crappy enough. My husband and I are just trying to do our best and prepare ourselves and our kids for when we have to eventually move. If we are still paying the house electric, water/sewer etc. (and making any repairs needed by section 8 or other tenants) I hardly think that places us in the "scamming" category. Okay, nervous breakdown postponed

[justbroke]

I don't believe anything unless it's on CNN. (Yes, that was tongue in cheek.) Without a very specific part of the guidelines, it does not make any sense and I have never read about this.

Oh, and stay off the Internet and don't talk to people!