The new federal law, Protecting Tenants at Foreclosure Act that came into affect in June says renters must now be given at least 90 days before they have to vacate and they might be able to stay longer.
Even if the new homeowner is a real estate investor, the terms of the lease will still be valid. The renter or lessee doesn’t have to leave until the lease expires and the monthly rent payment has to remain the same. If there is no lease contract, the 90 day rule still applies.
The renter can’t be the person was just foreclosed on or someone in their family. The lease needs to be what they call and arms-length transaction, meaning it can’t be rented to family member or friend. In addition, the rent has to be “not substantially less” than fair market.
Protecting Tenants at Foreclosure Act of 2009 – States that any immediate successor in interest to residential property in foreclosure assumes such interest subject to: (1) giving an existing tenant at least 90-day notice to vacate; and (2) specified rights of such tenant to occupy the premises until the end of the lease.
Amends the United States Housing Act of 1937 to require a housing assistance payment contract to provide that in the case of an owner who is an immediate successor in interest pursuant to foreclosure: (1) during the initial term of the lease vacating the property prior to sale shall not constitute other good cause for termination of the lease; but (2) in subsequent lease terms vacating the property prior to sale may constitute good cause if the property is unmarketable while occupied, or if such owner will occupy the unit as a primary residence.
Authorizes: (1) a housing assistance payment contract entered into by the public housing agency and the owner of a dwelling unit to provide that the immediate successor in interest to property in foreclosure in which a housing assistance recipient resides assumes such interest subject to the lease between the prior owner and the tenant, and subject to the housing assistance payments contract between the prior owner and the public housing agency for the occupied unit; and (2) the public housing agency, where the successor owner cannot be identified, to use rental funds to pay for the property’s utilities if owed by the owner or for reasonable moving costs, including security deposits.
Read the full text on Preventing Mortgage Foreclosures
Moe’s posts from the past on Predatory Landlords:
Predatory Landlords: The Latest Foreclosure Scam
The simple act of renting a home for Main Street Americans has become a sick game of “Where’s the foreclosure?” or another popular rental hit, “Let’s see how long we can rent in this home before it falls into foreclosure?”
The scam of renting a home when it is in foreclosure and not paying the mortgage has now become a national epidemic. Personally, I believe this new Main Street rip off is more rampant than any loan modification or investment scam in the country at the moment.
First let me disclose that I am a “renter” and my investor/landlord/Realtor is being foreclosed on
In addition to the first disclosure, let me also disclose that I am a “renter” and my investor/landlord is being foreclosed on and yes, she is collecting my rental monies and NOT paying Washington Mutual (AKA the FDIC). Oh, and she is an ex-Realtor who takes my $2,550 every month and lives off of it.
How F’N convenient for her and how screwed for my family and I. (Wife and 3 boys) And you know what? There is nothing I can do about it, but rant here on my blog and bring this to media light.
Welcome to what I have dubbed, “predatory renting” and have been writing about for the last year (first blog post in Nov. 2007). Hopefully, main stream media will catch on soon? Hell, it took them a year and a half to catch on to the loan modification craze…
{ 5 comments… read them below or add one }
I wish there was something we could do. I rented a room from a family for 20 months and come to find they were in default of over $30K back in April. The house finally foreclosed and was repossessed by the bank in September. I gave this family over $10K during my tenancy toward a mortage they never paid. I was so freakin’ mad. Then she had the nerve to go to a collection agency in town and try to collect a debt that is no longer valid. I disputed it with the collection agency and they never validated the debt or provided anything within those 30 days. I sent a “Cease and Desist” letter and haven’t heard from them since! Freakin’ greedy ass people!
I’m a property manager, and I see this situation and more and more. For you venting rentors, unless you had a lease to purchase, what’s with the victim mentality?? If that is the case, than you have rights to demand the portion of the rent which was to be applied towards the purchase price. Yes there could be a cost of moving if you choose to abandon the property, or break the lease, which is not adviseable as you continue to be responsible for the terms of the lease, just as the home owner will ultimately be responsible for the unpaid mortgage, taxes, attorneys fees, etc. Depending if it’s an investment property, the homeowner will receive a tax bill for the difference of the defaulted amount, so rest assured, the homeowner will have to pay in the long run. I’d lay odds that the bank would PAY you to vacate the property to cover such moving costs as it would cost them to go through the eviction process. You’d be renting anyway, and you can probably find cheaper rent as a result of the excess inventory, so what is the difference?? If it does go to a foreclosure sale, which can take a year from the initial filing, the bank has to honor your lease and likely continue to rent to you to under the same terms as Federal laws protect your tenancy rights. 1-2 months prior to the end of your term, you’re in a strong position to offer a lower rent. If you want to stay in the property, make an offer to the lender to buy it, as you’re in an excellent position with a vested interest. It won’t matter to the owner, as the owner cannot receive funds at a short-sale. You’re actually in a strong position now to buy your domicile for what you’re paying in rent!
If your lease does not contain terms which address a foreclosure, email me and I’d be happy to provide a lease to protect your rights for future rentals and suggestions to position a proper short-sale offer.
My name is Tony Millholen I never gave you the OK to use my name to help your business please stop this at once,or you will be contacted by an attorney……
Who the hell are you? Where do I mention your name and also, lawyers make me laugh. So, with that said, NO!
Good morning Moe, I guess I don’t understand the web site . When you go on the search eng. under Tony Millholen there is a web search that says Tony Millholen on protecting tenants at foreclosure act. and one of the web sites that you have listed on your info page is at the bottom of the statment, about loanworkout I just want to make sure when people see my name I’m not sending people to a web site that I don’t know about and what it does. Too many People are being screwed over because of some web sites I don’t want to be one of them or friends trying to get a Loan Mod.from chase. That’s who the hell I am. Thanks