I currently rent a unit downtown. A few months back I started getting mail addressed to the owner that pointed to the fact he was missing payments; he was getting postcards and letters offering to buy the place as he was behind on his payments. I looked for the place on realtytrac.com and the address did not come up. At the time I thought maybe the owner had missed a payment or two, and because I did not see any other distressful information I let it slide.

Another month or two later I received a letter stating that over $7k in HOA fees were due as they had never been paid since the place was purchased late 2005 (the HOA fees are brutal at $500+). This time I decided to call the property manager who said he would look into. My position then was that I would not be making any more payments until I verified he was current on all the bills associated with the unit. The property manager said he met with the owner and supposedly verified that he was back on track with all of his payments (In case you think the owner and property manager are one in the same, I’m fairly confident they are not the same as the home had some Mexican artwork in a totally unfurnished place, and the property manager is a white guy that lives in East County.)

One thing complicating the situation, also making it more precarious, is the fact that the owner is Mexican and living in Mexico, and that he owes about $200k more on the place than it is worth. For the initial loan he put about 30% down, but refinanced twice for $100k each time so his total debt on the house was closer to 110% of the purchase price back in 2005. I also know he has a teaser rate loan. Sadly, the rent I pay is not even enough to cover his first mortgage, so he has some serious negative cash flow from the place assuming he decides to ever pay it.

So here is where I am now: The first NOD (I estimate about 5 months behind on the first loan) was sent earlier this month, and I am paid through mid May factoring in my security deposit. The earliest I would get the boot from a bank would probably be August, and my lease officially ends July 31, so I’m not too worried from the perspective. My question is, should I continue paying on a month to month basis after burning through my last month’s rent and security deposit that I pre-paid? Or should I reserve payment until I am provided with official paperwork showing that all the outstanding debt has been cleared? I really dont want to line this guy’s pockets any further than I already have.