Sunday, December 02, 2007

The Lender Foreclosed, Now What?

Question: My landlord's bank foreclosed on the house I am renting and he didn't tell me. What happens next?

Answer:
According to RealtyTrac, a company that tracks foreclosures across the country, nearly 1.8 million foreclosures have been filed nationwide so far this year. Foreclosures in October 2007 were up 94% over the same period last year. Though no firm statistics are available, renters are increasingly left without a place to live through no fault of their own. In many cases, a financially troubled landlord will pocket the rent and stop making the payments while the bank takes back the property.

Once a foreclosure sale takes places, the tenant has no guarantee of a place to live. You should contact the lender or new owner right away to discuss a possible rental agreement. The new owner might want to begin collecting rent right away, but bank-owned properties often are easier to sell when vacant. If you cannot reach an agreement with the bank, begin looking for a new place to live immediately.

If you do not leave voluntarily, California law allows the bank or new owner can serve you with a 30-day Notice to Quit. If you do not leave voluntarily, the bank can file an eviction lawsuit against you. You have no legal right to remain in the property and even the mere filing of an eviction lawsuit against you can damage your credit rating, so moving out voluntarily is your best option.

About the Author
:
Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

2 comments:

Jason said...

I agree with your answer. You can take it one step further and read the foreclosure laws for that state.

Here is an online resource for state foreclosure laws and index. Use this information as one of many sources to better understand foreclosure laws.

Foreclosure laws by State

There are many other government sites that can help you so take 10 mins and google' away...

Maggy Robertson said...

Yeah, I totally agree with your answer. "Once a foreclosure sale takes place, the tenant has no guarantee of a place to live. You should contact the lender or new owner right away to discuss a possible rental agreement" - this is the best thing to do!