Can Renters Be Thrown Out of Foreclosed Property?
By Gina PogolMortgage Credit Problems Columnist
Jesse Asks: I just got a call from my landlord. He said that his home (the one I am renting) is in foreclosure and that my family and I have to leave. When a bank forecloses on a house can it just kick out the renters like that?
Gina Says: I'm sorry about your predicament. Unfortunately, it's being repeated all over the country. In fact, I attended a recent conference in which HUD Secretary Shaun Donovan indicated that 40% of those displaced by foreclosure proceedings were renters. The investors just let the homes go into foreclosure but it was the tenants who became homeless. And often these folks do not receive the same notice they would under a normal eviction process.
The good news is that the Protecting Tenants in Foreclosure Act signed by President Obama on May 20th should go a long way toward protecting innocent renters from foreclosure evictions. The law requires banks who take back homes to allow renters to stay in the home for at least 90 days after foreclosure. If the house is sold to an owner who does not intend to live in it, the renters get to stay until their lease expires. Your state may offer even more extensive rights to you, but you need to know what they are.
The problem is that many tenants get little or no information; many have no idea the owner is in trouble with the mortgage until they are told to get out. And many like yourself have no idea that you have rights. To find out your tenant rights in your state, go to the Tenant Rights section of HUD's Website and select your state. In Nevada, for example, the information comes from the Department of Business and Industry. Others may provide it at their state housing authority or similar agency. In any case, HUD is the place to start. Housing counselors, charitable organizations, even your local sheriff's department may be able to assist you and help you and your family avoid a fast and possibly unnecessary eviction.
Good luck and thanks for writing,
Gina
About the Author
Gina Pogol has over a decade of mortgage lending experience, in addition to practice as a paralegal for a bankruptcy attorney, and as a business credit consultant for Experian. She is also certified to underwrite Fannie Mae loans. She earned her BS in Financial Management from the University of Nevada.
All information provided “as is” for informational purposes only, and is not financial advice. MortgageCreditProblems.com, its affiliates, and any of the independent providers of information on this site shall have no liability for any informational errors or incompleteness, or for any actions taken in reliance on information contained herein.
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