Found out the house I'm renting today is entering foreclosure

[thestrangebrew1]

This happened to us a few years ago. My wife and I were pretty naive when we first found out and cont'd to pay rent for about 2 mos, then wised up. Sucks, but at least you know what's going on and don't have to pay rent and pocket it for a deposit for your next place.

 

[rsutoratosu]

Another reason not to keep paying rent.. you probably pay to the wrong person and you end up getting screw

http://www.nolo.com/legal-encyclopedia/renters-foreclosure-what-are-their-30064.html

New Owners Means No Maintenance
Many tenants have no idea that their building has been taken at foreclosure. They continue to pay rent to the former owner, who often pockets the money but is hardly inclined to maintain the building it no longer owns. In the meantime, the new owners simply refuse to be landlords, never making repairs or even paying utility bills. Because the banks are stuck with increasing numbers of foreclosed properties that they can't sell, they remain non-landlords for some time, making life impossible for their tenants until those tenants are evicted.

 

[rsutoratosu]

Cash for keys, eventually you can get paid to leave the place make em pay you
http://homebuying.about.com/od/foreclosures/a/101008_tenants.htm

 

[Blackjack200]

Hmm, I don't know. I would imagine the landlord could still get a judgement against you for the rent you're under contract for. But there could be other laws governing this kind of thing that I'm just not aware of...

 

[EagleKeeper]

1) Put rent payments in escrow
2) Let bank know you have a lease for x months left on it.
3) If interested in the property, let the bank know.

 

[Genx87]

Why are you under the assumption the new owner would want you out? Chances are it will be bought cheap by someone looking to add a rental property. This is pretty common. A rental property that is already beig rented = instant cash flow.

Keep the house in good condition, make it atttractive to buyers. You could even end up with cheaper rent than you have now.

DON'T stop paying rent, that's just begging to get evicted. So you could stay there for another 6 months without being kicked out? Great, but you'd also be another scum of the earth pece of ghetto trash that is ruining this country.

Other option: buy it yourself. The banks look to offload forclosed properties, and who better to offload it to than the guy living there? Given a good forclosure deal, you could end up with a mortgage cheaper than your rent, with some equity already.

At auction it is rare anybody will pay more than the price of the mortgage for the property. So the bank will end up with the property. Most banks are not in the rental business and will not honor previous lease. Once the home is foreclosed and the redemption period ends. Then I would make an offer to the bank to buy it at a reduced price. In the meantime I wouldnt pay the bank anything. They will evict you anyways at the end of the redemption period so they can sell the property.

 

[twinrider1]

1) Put rent payments in escrow
2) Let bank know you have a lease for x months left on it.
3) If interested in the property, let the bank know.

1) Put rent payments in escrow

Absolutely. If ownership officially transfers during your lease, you want to make sure your payments get to the proper entity.

And it says a lot about the people here that are telling you to stop making payments altogether. The landlord may be a dirtbag, but that's no reason for you to follow suit.

 

[Newbian]

DON'T stop paying rent, that's just begging to get evicted. So you could stay there for another 6 months without being kicked out? Great, but you'd also be another scum of the earth pece of ghetto trash that is ruining this country.

The problem is his security deposit will not be coming back thus he needs to make sure he doesn't get that stolen if he keeps paying the wrong person.

Not to mention who will do the repairs / certain utilities if it was part of the rent agreement.

 

[Genx87]

1) Put rent payments in escrow

Absolutely. If ownership officially transfers during your lease, you want to make sure your payments get to the proper entity.

And it says a lot about the people here that are telling you to stop making payments altogether. The landlord may be a dirtbag, but that's no reason for you to follow suit.

I said stop making payments all together once the bank has possesion of the property. There is no lease with the bank. Why pay?

 

[EagleKeeper]

1) Put rent payments in escrow
2) Let bank know you have a lease for x months left on it.
3) If interested in the property, let the bank know.

1) Put rent payments in escrow

Absolutely. If ownership officially transfers during your lease, you want to make sure your payments get to the proper entity.

And it says a lot about the people here that are telling you to stop making payments altogether. The landlord may be a dirtbag, but that's no reason for you to follow suit.

I said stop making payments all together once the bank has possession of the property. There is no lease with the bank. Why pay?

1. You do not know what the laws may be regarding eviction when in foreclosure. Until foreclosure is actually approved by the court; you are still liable for the payments to the legal owner. Escrow protects you until the legal mess is resolved.
2. Puts the $$ aside if you need to move out quickly
3. Potentially gives you a down payment if they want purchase the place.

 

[SSSnail]

1. You do not know what the laws may be regarding eviction when in foreclosure. Until foreclosure is actually approved by the court; you are still liable for the payments to the legal owner. Escrow protects you until the legal mess is resolved.
2. Puts the $$ aside if you need to move out quickly
3. Potentially gives you a down payment if they want purchase the place.

Smart man! But yeah, when I said don't pay rent to the previous owner, I meant stash it so you can act when you need to, not blowing it on hookers and blow.

 

[Red Squirrel]

Wow that sucks. Talk to the bank, and see if you can maybe buy it once the process is over so you're not stuck moving, and at least you'll own it.

Seems foreclosures are happening a lot, do people not pay their bills and think they can get away with it?

 

[Wreckem]

Legally when you assume a property, through a sale or foreclosure, you assume all leases, etc. on the property. So yes they have to honor the lease until completion.

Edit: I forgot the "Protecting Tenants at Foreclosure Act of 2009", was extended to Dec 31, 2014. If it was allowed to expire as originally intended(Dec 31, 2012) what I said would have been true.

 

[Wreckem]

Wow that sucks. Talk to the bank, and see if you can maybe buy it once the process is over so you're not stuck moving, and at least you'll own it.

Seems foreclosures are happening a lot, do people not pay their bills and think they can get away with it?

Welcome to the last 5-6 years. Even this many years after the housing market collapse foreclosures are still happening a very high rate. Not as high as they were but still well above normal.

 

[Avalon]

Forgot I made this thread

So, not much news. House is still in pre-foreclosure, the original owner still owns it at the moment, not the bank, and if I don't want to be evicted I am legally obligated to pay the rent agreed upon in my lease.

Spoke with the rental company that manages the place and told them I am interested in a short sale. Would save me and the bank time/money. Rental company thinks it's a good idea but are extremely unhelpful. It's been a few weeks now and I don't think they've gotten in contact with the owner, and who knows with the bank. Kind of need those two to agree first.

Unfortunately I've never even bought a house before, so it doesn't help that on top of the above, I don't know what I'm doing. Chances are I'll just wind up moving out.

 

[DCal430]

Forgot I made this thread

So, not much news. House is still in pre-foreclosure, the original owner still owns it at the moment, not the bank, and if I don't want to be evicted I am legally obligated to pay the rent agreed upon in my lease.

Spoke with the rental company that manages the place and told them I am interested in a short sale. Would save me and the bank time/money. Rental company thinks it's a good idea but are extremely unhelpful. It's been a few weeks now and I don't think they've gotten in contact with the owner, and who knows with the bank. Kind of need those two to agree first.

Unfortunately I've never even bought a house before, so it doesn't help that on top of the above, I don't know what I'm doing. Chances are I'll just wind up moving out.

Do you have money for a down payment? If you like the home and area, it could be worth it.

 

[Avalon]

Do you have money for a down payment? If you like the home and area, it could be worth it.

Yeah, I could swing about $8-9k in a pinch. Place is worth ~$115k (well, neighboring houses all sold for that much over the past year, and it's the same style townhouse, same config) and I was going to offer about $80k and see if the bank accepts as opposed to going down the foreclosure path.

I'm not crazy over the house, but I don't dislike it. The area is very nice. Honestly I wasn't expecting the possibility of buying a home this year, but if it's financially gainful to do so, I'll go for it. Our jobs are all close by so even if we did move, it'd probably be the same area. I don't think I'd buy it if I didn't get a deal on it.

 

[1sikbITCH]

Forgot I made this thread

So, not much news. House is still in pre-foreclosure, the original owner still owns it at the moment, not the bank, and if I don't want to be evicted I am legally obligated to pay the rent agreed upon in my lease.

Spoke with the rental company that manages the place and told them I am interested in a short sale. Would save me and the bank time/money. Rental company thinks it's a good idea but are extremely unhelpful. It's been a few weeks now and I don't think they've gotten in contact with the owner, and who knows with the bank. Kind of need those two to agree first.

Unfortunately I've never even bought a house before, so it doesn't help that on top of the above, I don't know what I'm doing. Chances are I'll just wind up moving out.

Might be in your best interest to contact the owner directly. He may not realize how much of an option it is for him.

 

[runzwithsizorz]

Am I the only one who finds it odd that someone not making payments on a rental property, still employs a rental property management firm?

 

[mmntech]

When life gives you lemons, you gotta make lemonade. $115k is a steal for a house. Hell, I can't even get a one bedroom condo for that. Better to sink your money into equity then rent payments to a deadbeat. Bank might be willing to negotiate too if they want to get rid of it quick. Depends on what the owner wants to do.