What if the House I am Renting is in Foreclosure?

Bar Association ApprovedIt can be a renter's worst nightmare to find out that the house they are renting is going into foreclosure. Getting an eviction notice can be confusing and surprising, especially since most landlords withhold this information, in fear that if they tell the renters about the foreclosure, they will stop paying rent, which is what landlords rely on in attempt to save the home.

Such evictions have been steadily rising since the number of foreclosures has increased in the U.S. Before May 20, 2009, renters would lose their leases upon foreclosure. Most states followed the rule that if the mortgage was recorded before the lease was signed, a foreclosure would wipe out the lease. This changed when President Obama signed the "Protecting Tenants at Foreclosure Act of 2009." This act ensures that leases survive foreclosure and that renters stay until the end of their lease, or have 90 days before having to move out, if they are month-to-month tenants.

Renters are also given options that Fannie Mae and Freddie Mac have introduced, giving renters the opportunity to continue staying in the home after foreclosure. One option is for renters to purchase the property, before or after the foreclosure process. This can turn out to be advantageous to the renter, since it gives them the opportunity to jump from renter to owner.

These rental programs are set up by property management firms that Fannie Mae and Freddie Mac have hired in order to oversee and sell their foreclosed properties. These foreclosed properties are called Real Estate-Owned (REO). The property managers then give renters another option called "cash for keys", in which the bank offers a cash settlement deal with the renter in exchange for them turning in the keys and vacating the foreclosed home.

If you are a renter, it is important to learn about your rights as a tenant. Speak to a lawyer about what steps you can take in case your landlord loses the home in a foreclosure. Attorney Search Network can help you find a lawyer in your area today.

If you have any questions about the information provided above, please contact Attorney Search Network.

Contact Attorney Search Network for an Attorney Referral to an pre-screened Foreclosure Lawyer.

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