Landlord's troubles a housing bust bellwether

San Francisco real estate investor Rutsutee Vairojananunt bought five residential and commercial properties in Sonoma County between 2002 and 2004 as the housing market was soaring to unprecedented highs.

Now her investments are crashing down around her, giving her tenants an uncomfortably close view of the foreclosure crisis.

Last week, Vairojananunt lost a Petaluma property to foreclosure.

On Tuesday, the four-unit Humboldt Street residence in Santa Rosa -- where she rented an apartment to Donald Houck and Michael Newton -- will be auctioned off on the steps of the county Hall of Administration. Another Santa Rosa house is scheduled for public auction next week.

"I bought when the market was too high. My mortgages are too high," Vairojananunt said.

She declined to say much about her real estate investments and why she fell behind on the mortgages.

The Humboldt Street four-plex went into default in February. But her tenants didn't know Vairojananunt might lose the property until notice of the foreclosure sale was posted last month on Newton's front door.

"It was a pretty big shock. I made copies for all the other tenants," Newton said.

Since then, Houck and Newton have spoken with their landlord. They doubt she can pay the mortgage or gain more favorable loan terms and hang onto the home.

"She says she's going to get it modified, but there's no way. She's too far behind," Newton said.

Frustration with their building going into foreclosure has been replaced by uncertainty about what to do while waiting for a new owner or the bank to take over the home.

An attorney recommended the roommates only pay nine days of rent to Vairojananunt this month because the public sale is set for Tuesday, the ninth of the month. Otherwise, they are looking for another place to rent.

"There's nothing else that we can do," Houck said.