Important advice for renters if your landlord faces foreclosure
January 8th, 2009 Categories: Dacula, Gwinnett
OK, so let’s say that you are currently renting a home in Gwinnett County or any other part of Georgia and you are paying your bills, but your landlord isn’t. One day the Sheriff comes to your door and hands you an eviction notice letting you know that your home is in foreclosure and you have to move out. It is happening more and more and do not think it can’t happen to you.
This scenario is becoming a familiar scenario for thousands of renters nationwide who have become victims of foreclosures. Banks are removing good tenants with little to no notice after taking a property from a delinquent owner, ignoring tenant leases in many cases.
So what do you do???
Fannie Mae this month pledged to change that with its new renter policy starting in January. The plan will allow renters living in foreclosed properties to sign new leases with Fannie while the property is up for sale, or give the tenants money to relocate. Fannie has yet to establish the length of the leases, and the amount of move-out assistance will vary by state and property.
Freddie Mac says it will unveil a similar program in a few weeks.
But how does a renter know if his landlord has a Fannie- or Freddie-held mortgage? Worse yet, what about renters of landlords who don’t?
Fannie plans to reach out to tenants, says company spokesman Brian Faith.
“Most tenants don’t normally know the details of their landlord’s mortgage arrangements, but we’ll be contacting the tenants in foreclosed properties we own to make them aware of the option to stay in their home through a lease with Fannie Mae,” he said in an e-mail.
The details of Freddie’s tenant plan are still unavailable at the time of the post.
Fannie May and Freddie Mac own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. Fannie estimates about 4,000 tenants live in the company’s foreclosed properties and would be eligible for the plan.
The really bad news is that, that’s just a fraction of renters facing the consequences of a landlord’s foreclosure. Approximately 15 million renters, or about 40 percent of all renters, live in single-family homes, many of which are owned by investor landlords. This is where the risk lies.
What should you do if you receive a foreclosure or eviction notice?
“Don’t panic or stick your head in the sand. Neither action will be helpful,” says Robert Baker, education coordinator at Housing and Credit Counseling Inc. in Kansas.
Call the sheriff’s department first, Baker says. Find out how long the foreclosure process takes. Is it 60 days or 90 days? Then you’ll have a timeline to work with and time to prepare for the worst-case scenario.
Next, get on the Internet and find out the rental laws in Georgia. Some states, including California and Illinois, have recently passed legislation giving renters a grace period, ranging from 30 days and up, to stay in a property after it’s been sold in foreclosure. Others are considering similar legislation.
The lender’s name or its lawyer will be on the eviction notice. Contact either one to let them know you’re in the property. Find out what your options are. Will the lender let you sign a new lease or is the bank offering some cash assistance for moving out? Don’t let the lender bully you into moving out sooner than stated by law.
If you’re nervous negotiating with the lender on your own, contact a local nonprofit housing counseling agency for help. HUD’s web site lists agencies by state or you can call its toll-free number 1-800-569-4287.
If you are worried about your current landlords financial situation you can also do a little digging if you’re worried about a possible foreclosure. Go to the county courthouse or its web site and do a rudimentary background check on your landlord. District court records or the county recorder’s office will show if any foreclosure actions or judgments have been filed against your landlord. Are there any other records showing financial distress like past or present bankruptcy filings? These can be telltale signs of a landlord strapped for cash, Baker says.
Last, has the condition of your rental property suddenly deteriorated because of neglect? If the landlord isn’t making repairs, maybe it’s because he can’t pay for them or doesn’t want to spend money on a property he’s about to lose.
For more information or if you think you might be in this type of situation give me a call and let’s see if we can help you when and if the time comes.
HELLO, MY NAME IS SHELIA MCCOY,I HAVE A TWO SON AND I SIGNED A TWELVE MONTH LEASE AND HAVE PAID $1000.OO A MONTH ON TIME FAITHFULLY TO MY LANDLORD. GERALD MARTIN WHO WORK FOR THE NEW YORK CITY POLICE DEPARTMENT.I JUST FOUND OUT THAT THE TOWMHOME THAT I’M CURRENTLY RESIDING IN WHICH IS LOCATED IN RIVERDALE GA,30296 ON HALLIGAN POINTE IS UNDER FORECLOSURE WHICH WAS PURCHASED IN MARCH 2007 BY HIM AND WILL BE AUCTIONED OFF ON MARCH 3RD 2009. DUE TO GERALD MARTIN WHO HAS NOT BEEN PAYING HIS MORTAGE. I CALLED HIM TO ASKED WHY HE DIDN’T TELL ME HIS RESPOSE TO ME WAS I WAS WAITING TELL ME TWO MONTHS BEFORE THE PROPERY WOULD BE SOLD AND LAUGHED! SO BASICALLY HE KNEW AND STILL COLLECT MY RENT FOR 6 MONTHS AND DIN’T DAY A WORD UNTIL I RECEIVED A LETTER THAT WAS ADDRESSED TO HIM FROM A LAYWERS OFFICE DEMANDING THE TOTAL AMOUNT OF 158 THOUSAND DOLLARD TO SAVE THE PROPERTY.. I AM SO UPSET THAT THERE ARE NO LAWS TO PROTECT US HARD WORKING SINGLE PARENTS WHO FALL IN THE HAND OF THESE GREEDY MONEY TAKING THIEFS..
Sheila,
This is the exact type of situation that I wrote about and it is a terrible thing that is happening. However, unless YOU decide to try to do something you may have to vacate the property quickly. My suggestion (it may be time consuming unfortunately) is to go to try and contact the lender who’s name should be on the eviction notice if you received one. If you are not comfortable calling them, please contact through HUD, 800-569-4287. They may be able to help guide you. If not call the Sheriff’s department and see who handles evictions. Let them know the situation and see if they have any adivce.