Ive been foreclosed!!!!!

[mking]

My landlord did actually. Notice posted today. Apparently they have been pocketing my rental checks and not paying their lender. Naughty, naughty, naughty.

In 2007 I needed to move from Tacoma closer to the Eastside. I was smart (sort of). After being outbid 3 times in spring of 2007, I decided to rent.

Has anyone here had their rental foreclosed on? Anyone had luck negotiating with the noteholder? Do I need to plan on vacating immediately after the foreclosure?

Any suggestions? Thanks

[Markor]

My understanding is that the lease comes with the house. The bank may try to bully you to leave, or have a law firm they contract with do that. If they don't want to honor the lease they can pay you to end it early. Maybe do some internet searching because there's been a lot of articles about this situation.

[mking]

More info:

(the first info i had was relayed by my roomie)

Notice of Default. Some $19k in past due payments, plus $2k or so in fees. Thats a monthly payment of about $4750 per month (I think their ARM adjusted painfully). we pay $2000/month, and have been here since Sep 07. Our 1 year lease expired, and now we are month to month tenants. Balance on the loan is about $370k. Note holder is HKSB (USA). According to the notice, may be sold at public auction no less than 120 days from this notice.

So looks like we have 4 months, plus whatever new grace period AFTER the foreclosure sale (and who knows if the foreclosure sale will be held promptly). Ive read the new federal foreclosure rules require month to month tenants to be given 90 days notice. So it looks like we have at least 7 more months.

The house next door (a bit smaller) sold for $290k last year. I think HKSB will take a haircut. The house needs a new roof, and its a big house. I think it needs more than $20k in repairs (we get some minor leaks each winter).

[Markor]

Wow. I hope you didn't have a big deposit.

[WestSideBilly]

[Markor]

Good point. Yeah I'd stop paying, in lieu of losing the deposit and for the hassle. Doubtful mking would get kicked out early in that case.

[ShilohStreet]

Yea, unfortunately, that's getting to be a common situation these days

I would definitely check with a lawyer about the situation but I'd be prepared to move quickly. In all the similar cases I've heard, the renters end up having to move rather soon.

I'm not an expert on the "foreclosure/lease" situation but be prepared, just in case.

You may check with the state about landlord tenant laws. I'm sure they can point you in the right direction and have a million folks calling on the same situation.

[Grubbie]

This happened to me and my now wife last year (Jan 09).

Our lease was ending in Feb and we decided to just move out as we didn't want to deal with the stress. From the research I did (might not be 100% accurate) is the following

You are still required to pay rent, since you are paying rent to the actually owner (until it is foreclosed)

Once the house is auctioned off, the lease is voided (different if it was sold, the lease is still valid, but at auction the lease is voided) - note you might want to take a look into this as I could be wrong. Once it is sold at auction, you have two weeks required by law before they can kick you out - You can all the company on the notice of default and ask them, they will be helpful. I'm assuming it was a notice of default, in 30 days you will get the Notice of Trustee sale which can't have the auction for 90 or 120 after the notice of trustee sale.

For the place I was renting, they defaulted in Sept 08, we got the notice of default Jan 09. Notice of trustee sale followed in Feb 09. The auction was scheduled for May, postponed to June, July, August, September. The September auction was cancelled due to bankruptcy the day before the auction. This whole time the place was on the market, and sometime in the last two months went pending (still not owned by the bank).

If you are month to month, I recommend just moving on. Spend time (no rush for at least 120 days) to find a new place. Also talk to your landlord, tell them you got the notice of default. By law, they can't keep your deposit (if you are in Seattle). If they do, you can take them to small claims court (I'm not a lawyer, but this is what I remember reading in the Seattle tenant rules. The deposit is supposed to be in a separate account). Just don't stress out about it, it sucks and is a shock but in the end moving will be the best bet.

In my case, the landlords felt bad (we had emailed them the night before the first notice asking for a 7month extension to our lease). We moved out 2 months later and got our deposit back in full. No hassle and they even gave us a good recommendation to our new landlords.

[perfectfire]

There are new laws that the lease is not voided when the house is foreclosed. Here's a idea, find a homeowner who is about to default, sign a 3-4 year lease with him at a ridiculously low price. He makes money until the bank repos, and then you get to live in the place for peanuts until the lease runs out because of the new law.

[Haybaler]

Sorry, Perfectfire.

The protections provided under the Federal law allows tenants a term of 90 days or to the end of the lease, whichever is sooner.... Only, if the lease terms are "fair market" priced and "arms length".

Of course, the problem then becomes one of who is going to collect the rent and provide maintenance during the remainder.....those are new issues that are just now beginning to come up.

[Markor]