What is happening too often today is that many people are paying their housing expenses and rent on time, but their landlord isn't paying their mortgage on the rental property. The property may then be foreclosed by the bank or lender, and then you end up being the one holding the eviction notice. But there are laws to protect tenants, and you do have rights in this situation.
Sadly this is an all too familiar scenario for tens of thousands of renters nationwide who have become the innocent, unintended victims of the housing crisis and the resulting foreclosures. Banks and other financial companies continue to “boot” good tenants onto the streets with very little, or even no notice, after seizing a property from a delinquent owner who failed to pay their mortgage. These banks are ignoring tenant leases and their rights.
In some of the the most troubling cases of eviction, some individuals and families are forced into shelters for temporary housing because they have very little savings to pay for last minute moving costs, the first month's rent at another new apartment and/or can’t afford a security deposit.
While some companies, such as Fannie Mae, have committed to changing that with its new renter policy that starts this month, many more banks and companies are not doing anything about this situation. The Fannie Mae plan allows renters who are living in foreclosed properties to sign new leases directly with Fannie Mae while the property is up for sale, or the renter may also receive grants or money to relocate. The amount of move-out assistance paid to tenants will vary by state and property. Fannie Mae has estimated that about 5,000 tenants that live in its foreclosed properties would be eligible for this assistance plan.
But that is just a fraction of tenants and renters who are facing the consequences of a landlord's foreclosure. Renters in large complexes are probably safe from being evicted because delinquencies on multifamily loans are still very low. However over 15 million renters, or about 40 percent of the total of all renters, live in single-family homes, and many of these are owned by mom-and-pop investor landlords. That is where the risk lies in a home being foreclosed, and a tenant being evicted.
1) You need to contact the sheriff's office first. Find out how long the foreclosure process takes. Does it take 60 days or 90 days? Once you know that, you will have an established timeline to work with, and you will also have time to prepare for the worst-case scenario.
2) Most states have lawyers who will provide renters with free legal advice when someone is facing an eviction. The applicants will need to usually be low or moderate income, be over 60, or disabled, but the legal support you can get for an eviction due to a foreclosure is extensive. Click here to learn more.
3) Next, get on the Internet. Research the rental laws in your state. Many states have recently passed legislation that will provide renters a grace period of 30 days or longer to stay in a property after it's been sold in the foreclosure process. These laws are meant to protect the tenants.
4) On the eviction notice will be the lender's name or the lawyer’s name who is representing the bank or lender. Contact either of these parties to say that you live in the property that is being foreclosed. Find out what your options are. Will the lender let you sign a new lease to stay in the property, or is the bank offering some cash assistance or grants for moving out? Never let the lender bully you into moving out of the property sooner than is allowed by the law in your state, per (2) above.
5) If you are anxious or nervous about negotiating with the lawyer or lender on your own, contact a local mortgage counseling agency. If you are thinking of contacting your own attorney to review your rights and the laws, remember that a large number of these tenant-rights lawyers are hard to find and can be expensive to pay. And with the slowing economy, legal-aid offices across the country face severe budget cuts.
If you are concerned about your landlord foreclosing on the property that you are currently living in, you can do a little research into their financial situation. Go to the county courthouse or its Web site and do a basic background check on your landlord. Also, contact your local Better Business Bureau to see if any issues or complaints have been filed against your landlord as that can be a strong clue that something is wrong or may happen.
Also, be sure to look for warning signs, as these can be telling. A landlord who is suddenly failing to make repairs to the property could be another warning sign. Other indications that the home may soon be foreclosed could include property owner being out of town more frequently or if they are asking for a rent payment earlier than normal. Or a landlord who is not returning messages timely.
Like this site?