Increasing number of foreclosures forced many people to rent instead of owning their property and people find renting economically favorable for their budget. Unfortunately the foreclosure crisis in the United State forced many landlords abandoned their properties where tenants are currently living. As a result, many renters are given short – term notices of eviction by landlords, mortgage lenders and banks. Besides the losing their rental – deposit.(1) The unfortunate circumstances for these innocent victims or renters gives a short-term notice, make arrangements to live someplace else or leaving them homeless. Many renters have not only been evicted from rental properties but had to leave their own homes, because their property had fallen into foreclosure. In some cases, tenants in foreclosed rental properties are given notice by law enforcement thirty days or less to move out otherwise be evicted (As well, probably be arrested).(1) The situation is much worse for evicted tenants who have children that can’t find immediate housing or shelter. Sometimes a renter is fortunate the bank, lending institution or new owner of the property will allow tenants to continue to stay on the property and pay rent. (Notices send in the mail, posted on the property or done in person 2).
Many scrupulous landlords knowingly rent their property that is pending or inevitable will fall into foreclosure, without notifying their tenants, thus pocketing the rental money rather than paying the mortgage and other services including utility expenses. 6 RealtyTrac (TealtyTrac.com) reported (December 2008) in the United States 400,000 properties are delinquent or waiting for foreclosure sales, about one-third were occupied by renters. 3 Most people who sign a rental lease contract don’t check or unable to check if the property to be rented may fall into foreclosure. Sometimes tenants can check if the rental property may fall into foreclosure or currently is in foreclosure. Recent legislation signed by President Obama gives tenants more time to stay in a foreclosed rental property, while searching for new residence or making other arrangements. 4 Some States including California passed similar legislation to provide more rights for tenants and other State legislatures are considering similar rights for tenants.3
In June 2009, under the ‘Helping Families Save Their Homes Act’ bill signed into law by President Obama provides tenants the right to stay in their homes (provided the rent has been paid on time) after foreclosure for 90 days or through the term of their lease, including those who are ‘Section 8 tenants’ (Those who receive Federal assistance or Housing Choice Voucher Program provided by the United States Department of Housing and Urban Development 5): The necessary time provides tenants to seek new housing and relocate. “The protections go into effect immediately and expire at the end of 2012.” Under California law tenants are permitted to stay in a rental property for 60 days from the time of notice of eviction, after foreclosure but the new Federal legislation provides those tenants (Besides other State similar rental protection for tenants) more favorable duration of time. 4 Fannie Mae and Freddie Mac (lending institutions), the largest holders of mortgages in the country, said earlier this year (2009) would stop evicting tenants from properties that had fallen into foreclosure. 7
RentalForeclosure.com provides access to search for listed rental properties (U.S.A) in foreclosure, before signing a rental lease.
Evicting tenants from a foreclosed property for many reasons does not make any good sense, especially if the mortgage lender plans to place the property for sale. If the property is abandoned will likely fall into disarray or be vandalized, devaluing the property value (besides complaints from neighbors) and cost to refurbish or clean-up. At least the current tenants will maintain the property even if they may not be 100% Spic ‘N Span and rent is still collected to pay the basic utilities and other expenses.
1.) Renters can’t escape housing foreclosure crisis –
2.) Tenants Caught in Foreclosure: Who Gets the Rent? – http://www.nolo.com/article.cfm/ObjectID/CEC25BA6-41F1-4481-AB27C43E1937305F/catID/F952FED3-0C94-4431-862E21322CCD72B6/104/138/305/ART/
3.) Tenants in Foreclosed Properties Receive Help – http://www.realestateproarticles.com/Art/2715/265/Tenants-in-Foreclosed-Properties-Receive-Help.html
4.) New federal law protects renters after foreclosure – http://www.kvsun.com/articles/2009/06/14/news/doc4a256fe70a96b911859649.txt
5.) Section 8 (housing) – http://en.wikipedia.org/wiki/Section_8_(housing)
6.) The Other Side of Real Estate – Renters Evicted from Foreclosed Homes – http://rismedia.com/2009-06-15/the-other-side-of-real-estate-renters-evicted-from-foreclosed-homes/
7.) Fannie Mae Not Evicting Tenants After a Foreclosure – Heres Why – http://www.theexpertsinrealestate.com/201/fannie-mae-not-evicting-tenants-after-a-foreclosure-heres-why/