Our rental home is in pre-foreclosure?

[mom]

Febuary 1st of this year we moved into a rental home owned by a life-long family friend. Our rent is fairly inexpensive for a 3 bedroom 2 bath ($850) in Redding California. We paid a security deposit of $500 (also inexpensive) before we moved in. We have been paying rent on time every month. At the beginning of this month our landlord asked us for a copy of the lease (6 month lease), saying she can't find hers. She also asked us if we were interested in signing a longer lease for a year after this one is up. We told her we would love to.

We didn't think anything was going on until we found a "Notice of Trustee's Sale" on the front door a few weeks ago. In the notice it says "On June 29, 2010 ............. will sell at public auction to highest bidder........."

It says the notice of sale is $134,743.51, which I am surprised... I remember when she bought this house 20 something years ago. I figured it was paid off.

I sent the landlord a text telling her about the notice, she text back saying "I am pretty sure I know what is up. I will get back to you" She never did.

Two weeks ago my husband and I got a certified letter saying the exact same stuff as the "Notice of Trustee's Sale". I sent the landlord an email telling her. She wrote back "I'm so sorry! I have taken care of that but it looks like the release has not been received by the selling agent. I will make a call and if there is a problem I will let you know...Once again I'm very sorry!"

I didn't hear anything back, so last week I sent her an email saying "Have you heard anything"... to which she never responded. I know she has been online too because she has commented on several of my facebook photos and status updates... lol

I have looked at several of those 'foreclosure' websites, and our rental home is on every one of them.

I asked a friend of mine that is a mortgage lender and he told me to just wait it out and see what happens. My sister in law is a Realtor and she told us to stop paying rent and just wait it out.

Tuesday is the day that it is suppose to be auctioned. I am worried that we will have 3 days to pack and leave... Kinda hard to do when both my husband and I work full time, my husband is a full time student and we have children ya know...

I guess my question is... what is going to happen on Tuesday? Do you think maybe she worked it out with her bank but just forgot to let us know?
Dang... expert Realtor... HARSH! I will pray that more friends come into your life so that you aren't such a meaner...

I did call the number on the notice, it was just pre programed information on when the Auction was, and at the end of the "pre programed information" it said that basically said that the information was not certain.
I also am curious as to why, if we were paying her, why the mortgage is behind so much.

If a bank, or private party purchases the house, could they increase the rent amount on the lease? Or ask for more of a deposit?

I too am worried if we get a 90 eviction notice, what we will do. If we have to pay rent every month how then could we afford to move? To put a security deposits and first months rent on another rental?

LOL! This question has turned into a novel!

[Billy Cunningham]

your friend is ful of crap,


they borrowed against the proterty and are not paying the loan.

expect to be evicted soon, \DO NOT pay your freind a dime in rent from this point forward cause she is soon to no longer be the owner.

[Expert Realtor]

Ok, both your sister-in-law and your friend that is a mortgage lender is WRONG...and it's sad that they both work in the business and don't know how a foreclosure works. They both need to get out if they don't know the process.

Let me tell you what is getting ready to happen.

That notice, is non-negotiable. You won't have 3- days after Tuesday, TUESDAY WILL BE YOUR LAST DAY TO MOVE. You'll be removed by the Sheriff on that day and the house will be padlocked.

Having children, being a student, it being inconvenient, is NOT GOING TO MATTER.

You know why? Because the bank will say that they gave you ample notice and you CHOOSE not to move sooner.

Here is what is happening:

1. As soon as the home went into foreclosure and fell under the control of the trustee, which is an attorney hired by the bank. Once that action took place, your so-called friend lost ALL LEGAL CONTROL OF THE PROPERTY.

2. The law states that the bank DOES NOT HAVE TO EVICT TWO PEOPLE or even the owner...that is why no court action is required to put a house into foreclosure....the owner can file a motion to appeal it or delay it in SOME circumstances, but typically, these do not work.

3. The law protects the bank from further losses by stating that they get the property back on demand, upon default (and what is considered true default is regulated by state law), and the law requires them to deliver a notice to the property as well as to the last known address of the original owner IF DIFFERENT.

So, you received a two-week notice of a Trustee sale and instead of calling the number on the certified letter, you allowed your so-called friend to screw you.

Start packing...I'm DEAD serious.


You can confirm what I am telling you by contacting a REAL ESTATE ATTORNEY..

But I am telling you, Tuesday will be your LAST NIGHT in that house.

You have no legal rights to stay in that house after Tuesday and be sure to file a lawsuit against your friend for your deposit, because I am telling you now she won't give it back to you voluntarily.

Yes you can stop paying rent to. Your lease will not transfer to the new owner, because it doesn't in a foreclosure. You don't have a contract with the owner (which is now the bank) and your friend no longer has control over the property.

START PACKING.

[Anthony]

The first two answers are completely wrong! Any real estate attorney that knows real estate should be able to tell you that you have rights as a tenant. You don't have to move out by Tuesday...no matter what anyone tells you. You are protected under the Protecting Tenants at Foreclosure Act of 2009.

If the property goes through foreclosure on Tuesday, it just means that you will have a new owner. It will either be the bank or someone who purchases it then. From that point forward, you owe them rent just like you pay the current owner.

You can't be evicted just because the property is in foreclosure. If you have a lease, you have the right to stay until the lease expires. If the property is bought by a new buyer, they can give you a 90-day notice to leave if he or she will occupy the home.

If you are on a month-to-month agreement, you are entitled to a 90-day notice to move out before an eviction action can be brought against you.

The worst thing you can do is stop paying rent. If it does foreclose, you will be responsible for paying them rent. If you stop paying rent, you will be evicted much quicker. If the current owner succeeds in postponing the foreclosure sale while it is resolved, you still have to pay him rent. Just because a homeowner is not paying his or her mortgage doesn't mean a tenant can stop paying rent. One has nothing to do with the other.

Good Luck!
Real Estate Investor


EDIT:
As for why he is behind...it can be for many reasons. He might be going going through financial diffculties instead of just walking away as many homeowners are doing. His rental income might not be enough to cover his mortgage or maybe his mortgage payments increased. There are many different possibilities. Keep in mind that most homeowners keep this personal so it's best not to ask as to why.

Your current lease has to be honored by the new owner. When the lease expires and if there is a new owner, they can request a higher rent payment as long as it conforms with your states landlord-tenant laws.

When you have been given your 90-day notice, you do have to leave by that date. If not, the owner can start the eviction process and have the court order you to move out. You can always talk to the new owner about your payments and maybe work something out. It's probably unlikely, but it's worth giving it a shot. Also, if you do work something out, make sure it is in writing. This helps protect you.

[The Duke]

Even though the house is going to foreclose, you still technically have to pay rent. One has nothing to do with the other, trust me. It's a goofy law, but you can forecose on a rental property, and still collect rent on it for like a year or more without making one single mortgage payment.


However, if I am you, I would not pay him another dime. If the bank asks for money, that's a different story, but even they won't. They will give you like 60-90 days to move out.

Any city in any state has tenant rights, so that realtor guy a couple answers above me is totally wrong.