Renters in Foreclosure
Foreclosure has not only affected homeowners but renters too. The foreclosure crisis in the mortgage industry started in 2006 but since then it has seen more than a million foreclosed homes. Most of the victims of foreclosures have been homeowners, but there have been times when the renters have been the victims. Renters are usually caught unaware because they have no knowledge of pending foreclosure or that the property owner is not paying the mortgage.
There are many renters facing foreclosure and have lost their apartment or home. Renters tend to lose a lot more when the property owner is facing foreclosure. Renters will lose their homes, any deposit they may have had with the property owner, and will be forced to leave the property with sometimes with less than 72 hours notice.
The new foreclosure crisis scam that is creating big problems all over the U.S. is unsuspecting renters actually renting homes that have been foreclosed on. The large number of abandoned houses is creating a breeding ground for scam artist atempting to rent these houses. They will collect the required deposit IN CASH and as much rent as they can before the sheriff notifies the occupant that the home does not belong to the person in which you may have rented from. Be very suspicious of anyone that does not provide much information as to their identity and requires that you pay in cash.
Foreclosure takes place when a homeowner defaults on his/her mortgage payment. Once three consecutive payments are missed, the bank or the mortgage lender will send a notice for payment. If the homeowner is still unable to make the payment then the home will be foreclosed. Now if you are renter staying in the apartment, which is in pre-foreclosure then more often than not, your homeowner, will not inform you about the same.
When foreclosure happens, most renters will end up losing their leases. Most of the states have laws protecting renters, the only problem is the renter must occupy the rental property prior to the mortgage date. Most laws state that if a mortgage was recorded before the signing of a lease then a foreclosure on that particular property will wipe out the lease. This rule is called “first in time, first in right”. Of course this doesn’t mean that lease-holding tenants will have to vacate the home immediately but, in almost all circumstances you will have to vacate.
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