Off Topic: Foreclosure

[anonemoose]

You can check your county's Recorder of Deeds to see if the home has gone into foreclosure or not, and you can do this online. Lis pendens means the home has filed suit to take the house back.

If your landlord is in foreclosure and the bank has taken the house back, any monies you pay her for rent are going into her pocket, not to the bank. That's an issue between you and your conscience when it comes to paying. If the bank comes to you and says that you should be paying them rent, then you start paying them instead.

I know of someone who initially rented a condo from the owner, the condo got foreclosed, went back to the bank and the renter is now living there rent-free. He pays assessments to keep the association from trying to take the unit and that's it. The bank has no interest in taking a rental payment from him nor taking back the unit because it's a loss they have to put on their books, and many banks do not want to list losses. So the bank holds onto the property in their "shadow" inventory instead.

Something else can happen at this point -- the bank is going to take the house back, or they won't. Sometimes it so happens that banks drag their feet for months and years and never takes the house out of the previous mortgage holder's name. What happens in this situation is that the mortgage holder is responsible for the home all the way down to property taxes but is not making any payment to the bank. You, as the renter, is left in limbo as to where to send a rent payment.

Another factor is if you live in a recourse or non-recourse state. A non-recourse state means that your landlord can toss the bank the keys and walk away from her mortgage at any time and the bank cannot sue her to get their money back. California is one such state. Recourse states are where the bank takes the mortgage holder to court to get the home in lieu of the debt. I'm simplifying this a bit, but it's the general idea of how a foreclosure proceeds.

If you really like the house and would like to buy it, talk to your landlady about going to the bank together and taking a look at the options. Keep in mind that banks are awful about the housing situation in general, so a talk with a lawyer may be in order.

[funmom91]

Originally Posted by Jflats

This article should answer a lot of your questions. Also, it's rare that a bank will ever throw out a renter on a foreclosure. They will normally work with you and even offer you money to leave and you are no where near that stage.

Renter's Rights When Renting a Foreclosed Home | eHow.com

Okay that is very reassuring. At least I know I have time to find a place I like instead of whatever is throw at me.

[BamaScents]

This very thing happened to me before. The bank (which I think was GM or something) actually had a program "Keys for cash" and gave my family 1500.00 to help with the burden of moving.

Look into that. Each situation differs but by no means are any of them fun