18 Nov What To Do When Your Landlord is Foreclosed.
As part of the sub-prime mortgage mess, renters are also losing their homes to foreclosure. The fact that a tenant has been paying rent on time every month will not preserve their right to stay in their home. As banks and other lenders begin to take title to foreclosed homes, they are seeking to evict renters in record numbers according to a recent article in the New York Times.Because the lender’s mortgage lien on the property enjoys a higher status or priority than a lease, tenants can be evicted from apartments and homes even though they are current in their rent payments. The reason lenders do not want renters in a property is because of a perception that they will interfere with the resale of the home and that tenants are a maintenance headache. Even though a property might be worth less without paying tenants, the banks believe the properties can be resold much quicker.Sometimes as an incentive, the lender will offer a cash payment to the tenant to move out rather than pursue legal action. As with anything, it always good to get it in writing and make sure the person making the offer is authorized to so do. Get the money locked up.Also be aware than an eviction from a foreclosed property could affect your credit rating. Since it is a legal action in which you are a named defendant, the credit reporting agencies will pick up on any eviction judgment which could damage an otherwise sterling credit report.