My landlord is being foreclosed. Eeeeek.

[grasswire]

Just learned yesterday via certified mail that our landlord hasn't made her mortgage payments for six months and this home is being foreclosed. It will be sold by the lender in June.

This is horrible, horrible news. From what I read, the deposits held by the landlord will likely never be returned to us.

It's going to be a big, nasty mess.

Any advice, anyone? Can't afford a lawyer.

[Lorien]

1. What an awful situation. I don't have any legal advice

but I'm bumping this in hopes that someone else does!

:hug: :loveya:

Hang in there!

[Subdivisions]

2. Damn it! Sorry to hear this, grasswire. My best advice is to

start looking for another place to live. Don't panic. There's no time.

I do wish you well, dear.

[FrankieFunk]

6. Look on the web

For Renters Rights. They have to give oyu your deposit back if you are leaving the place basically as you found it, you could get a lawyer. I don't know if it will be worth it but you could pursue legal action to get your deposit back.

[WillieW]

30. Can't get blood from a turnip.

[bunnies]

3. This just happened to a friend of mine...

except they had no advance warning. Last week he was notified that he had 2 weeks to get out. The bank doesnt have to honor your lease, deposit, or anything. Better look for a new place.

[Lex]

10. Not true

in every state. In NC, for example, the lender does have to honor the remainder of the tenant's lease.

[bunnies]

18. good point. I should have stated... in NH.

:hi:

[Hassin Bin Sober]

14. But they DO have to follow proper procedure to evict the tenant.

That means including them in the eviction proceedings and giving proper notice which, I believe, would be more than two weeks.

That was the issue here in Cook County Illinois where the Sheriff refused to evict tenants if the bank didn't follow proper procedure to "discover" and serve the actual occupants.

[bunnies]

19. hmmm. I'll have my friend look into that.

Though I'm not sure it'll help much - since he's already been served. Cant hurt to try though! :hi:

[Hassin Bin Sober]

26. Just because he's been served it doesn't mean it was proper or legal.

The Cook County Sheriff put plenty of people out on the street before he finally put his foot down and decided to make the banks follow the law. Have him check if there is any free legal aide for renters in his town/county.

[bunnies]

33. I definitely will. Thanks for the advice! nt

[wartrace]

4. Stop paying rent until you are "even" on the deposit.

You WILL NOT get your deposit back if you don't. I would make sure you are settled up by the end of May and give notice that you plan to move out by the end of May.

[Fireweed247]

5. Are you still paying rent until then?

I would just not pay the last two months of rent. Do you have until June at least?

[Demobrat]

7. First call the sheriff

and see what their policy is on evicting tenants in your sitch. There are some places here in CA where they won't do it.

[Lex]

8. At least in my state, a tenant's lease still must be honored by the lender

who is foreclosing.

Many lenders offer cash to the tenant to "buy out" the remainder of the lease.

[grasswire]

21. we're on month to month, not a lease. (eom)

[Lex]

38. Then they have to give you the minimum legal notice to vacate.

And that's all probably.

[BeFree]

9. Stay put

Put your rent payments in escrow and demand the bank sells you the house at a payment equal to the rent.

Make them send the sheriff to evict you. They won't, they'll make a deal.

[T Wolf]

13. NOt sure of the legality of your suggestion, but it SHOULD be legal. It is a clean, direct

solution to a problem that would benefit more than just the original owners or the bank.

I LOVE it!

[joeunderdog]

43. banks are taking years to foreclose. they don't want to.

I know a guy who hasn't paid a dime in 6 months and hasn't heard a peep. Another guy is 2 years past his foreclosure notice and still in the house, not paying anything until he sees if the bank comes to the table with something (they falsified his wages to give him the loan, and now he can't pay.)

hold tight!

[flvegan]

11. If you want to stay put, I'd call the lender's attorney and see

if you can speak with the lender. Ask them if you can continue to rent the house from them post-foreclosure. Considering the REO market right now, they may well go for it. Problem is, if it sells to a third party bidder at the foreclosure sale, you may be screwed.

Good luck!

[grasswire]

25. yeah, there are four houses for sale in the same two blocks..

...that have been on the market for more than a year.

[flvegan]

31. If you really want to get crazy, and you like the place

ask them if you can assume the mortgage and get a Warranty Deed from the landlord. Get a title search done first, though. Remember, you'll also be responsible for the taxes, insurance, etc. Might still likely be less than your current rent altogether.

[radfringe]

12. check with the bank

some banks in our area are allowing tenants to stay in the homes or apartments that are in foreclosure and work out a rental agreement

Given the poor housing market - a 'quick sale' by the bank is unlikely and this would mean the house/apartment would be vacant for long time and it's conditiion would deteriorate - this is something the bank doesn't want to happen

regarding your rent - open an escrow account at a bank, deposit your rental payment in that account.

as far a finding legal help - you are not the only person in this predicament, it's possible your state has set up some mechanism to help you out, start by contacting your state rep, then move up the food chain to state senator etc.

[Warpy]

15. First, find a place to live

even if it's a cramped apartment with most of your stuff in storage. However, you've been notified that the building will be sold, not that you are being evicted. You still have some time to look around.

Second, go to the courthouse and file suit against your landlord for your deposit. You probably won't see a dime, but at least it will be on the record. Your deposit will probably fall under small claims, and you don't need a lawyer for that, just the copy of your lease and the canceled check.

Third, take your time to get over the loss. Live simply and save, preparing to get your next home once this mess has started to improve.

I'm sorry you have been screwed. Likely the landlord was mortgaged to the hilt, lost her own income, and has been struggling to stay alive, herself.

[grasswire]

20. here's the thing

The landlady has a brand new car plus two other vehicles and three other rental properties.

Another weird thing. The upstairs furnace (weird to have two furnaces in a 2000 sq ft house) has been malfunctioning for nearly two years and we have repeatedly asked for repairs to it. Just ten days ago we threatened to withhold rent if it isn't fixed. She immediately jumped on that and brought a repairman out to give her an estimate. It will cost several thousand dollars -- I know that for a fact because I was separately told that the furnace is obsolete and can't be repaired.

Why would she be willing now to spend several thousand on a house that she technically no longer owns?

Of course it's possible that she plans to redeem the loan by paying off the 12 grand she owes the lender.

[Warpy]

32. My advice still stands

and she's probably still living in la-la land. I would guess the vehicles belong to the bank along with her own home and her other rentals.

No one is more entitled than people who have always been rolling in it. They would be comical when conditions change if people like you didn't get hurt in the process.

You can hope she manages to scrape up the cash in the next six months, just don't count on it.

The woman is a flake. The sooner you're out of there, the better.

[grasswire]

35. you nailed it

We know she's a flake. I have good reason to think she's strung out on MJ.

[Stinky The Clown]

16. I woujld justs top paying rent. It will take months for eviction orders to move ....

... if in fact they even decide to try that. Use the saved money to offset the deposit and to pay the downstroke on a new place.

[madinmaryland]

34. Not necessarily. Here in MD if you are more than 10 days late, they can

take you to court to force an eviction.

I had a mess-up four years ago, with a firm that took us to court over a supposedly missed payment. It got credited on the 8th, and they dropped it. But they had taken us to court. Had we not been up to date, we could have been evicted very quickly. Tenant law in Maryland, does not give much leeway to the tenant.

[EFerrari]

17. First, does your city or town have a rent board Find out and call them.

Second, your rental agreement or lease and local law determines the deal on the deposit, not the mortgage holder. The mortgage holder will try to collect in any way possible but that doesn't mean they have a better claim than you do to your deposit.

[Hassin Bin Sober]

22. Most large towns or counties have free tenant legal help.

Check with your local government to see if they can put you in touch with free legal aide for renters. I know Chicago has such an animal.

At the very least, I would make sure I didn't get screwed out of any security deposit and maybe some moving expenses.

I would check with an attorney before you stop making rent payments. As sucky as it sounds, the landlord might be able to go after you or ding your credit.

All mortgage notes have a provision in them to demand rent payments if the owner/mortgagor is in default - I doubt that provision gets exercised much though.

[Phoebe Loosinhouse]

23. This is a very tough situation because there are so many possible outcomes

and I have read a lot of differing advice.

1 - Your landlord manages to negotiate with the bank and keeps the house. So, maybe try to get in touch with them and get a feel for the situation. They may lie to you just in order to keep the rent checks coming however. But, you can explain to them you will not be paying rent until the value of your deposit and security is recouped since they are at risk given the situation. Or pay them half the rent until the value is recouped. I honestly think that is a fair resolution to the situation.


2 - They are foreclosed. Talk to the bank's REO department well in advance. Banks know that vacant houses depreciate fast and can see lots of damage happening due to vandalism, burst pipes, squatters, etc. Tell them that you would like to stay in the house if possible. See if they will go month to month with you until it is sold. A lot of foreclosures are sitting with no takers because banks are not cutting the price enough because they want to recoup as much as possible.

3 - Look for another place as soon as possible and get out. The horrible thing is, how will you know that the same thing can't happen again? I said a long time ago that as much as landlords investigate tenants, so should tenants be investigating landlords.

4 - Do you like the house enough to buy it? See if your landlord's mortgage is assumable. It might get them out of a bind and get you a house at a reasonable price depending on the circumstances.

This is a big mess and it's one aspect of the foreclosure crisis that doesn't get enough attention.

[Stephanie]

24. Get a legal aid or pro bono attorney

Check Legal Aid, your local tenants associations, and the state bar assn for referrals. You should be able to get legal assistance regardless of your financial situation.

[dysfunctional press]

27. stay there as long as you can without paying another cent- while you look for new digs.

that's about all you can do.

[aikoaiko]

28. Call the bank to work something out. You might even be able to pick up the mortgage .

for less than your rent.

[shadowknows69]

29. Beginning to think that might be my fate

I'm in Upstate NY and my landlord is in Cali. She grabbed this dump cheap, on the evidence of just a few photos, and thought she was going to dump it quick for a profit. Ten people looked at it last year and said "No thanks".

[Blue_In_AK]

36. This happened to me back in 1990

when Anchorage had a real estate downturn. In my case, I was able to buy a foreclosed duplex (meaning I needed less actual income to qualify for a loan) which ended up being the best thing that ever happened to me, since the amount of the mortgage was relatively low and my tenant now pays about 3/4 of it. Since 1990 I've never had to rent to strangers -- just different family and friends over the years.

Keep an open mind. Sometimes the things that seem most difficult end up being blessings in disguise.

[LiberalEsto]

37. Call your county Bar Association

You can find their number in the Yellow Pages or via Google.

Bar Associations provide legal consultations at a fairly small basic fee. Our county's fee is $40 and it pays for a 45-minute consultation with a lawyer. They take turns volunteering to do this.

This lawyer should be able to direct you where to go next -- perhaps to low-cost Legal Services or some other program.

[no name no slogan]

39. THIS

Even if you think you can't afford it, you may be able to get the services of a lawyer: either at low cost, or the lawyer may work pro bono.

Good luck. :thumnbsup:

This is the DU member formerly known as C-I-L-L My LandLord.

[Posteritatis]

40. Mine got nailed (at least for the place I was renting) last year out of the blue; ugh

Guy was a saint with how he handled it though; took one of his other properties that was entirely his by that point that had just been vacated by the tenants and let us have it rent-free for the duration of the original lease.

I'm pretty sure I fell into the neighborhood of "way too damn lucky" on that one though. As for your situation, a lot of towns have organizations for dealing with landlord/tenant disputes; this would be a bit different but I'd assume they'd be prepared to give you advice/help in these kinds of situations, too.

[WVRICK13]

41. Breath Deeply

and use some logic. If they are selling in June you have a few months to work it out. First, deduct the deposit amount from the final rent and send a letter to the bank and the landlord telling them why you have taken this action. This is assuming the property is in the same or better condition than when you rented it. Take pictures when you move out to document the property condition. Send copies of the pictures to the bank and landlord. The most they could do is evict you and you are already moving. If they try to sue you there is a valid reason for not paying that amount of rent and documentation of the properties condition. Trust me no one will pursue you unless you have trashed the property.

[GentryDixon]

42. Hold out the amount of your deposit from your rental payments.

[soothsayer]

44. if fannie mae holds the note they will not evict you

http://www.nextwave.org/debt/fannie-mae-foreclosures-won%E2%80%99t-evict-renters-%E2%80%93-others-not-so-lucky/

[grasswire]

45. unfortunately, Wachovia holds the note

Wachovia is now owned by citibank, AFIK.