Renting a house going into foreclosure...
 

We are renting a house that might be going be into foreclosure, but it's not confirmed. Several times, Bank of America, has sent FedEx envelopes and front door knob knockers I call them, saying to call BOA. Our contract with the owner has expired and we've been renting month to month, while we figure out our plans. Right now it looks like I'm going to build another house, so we'll need to be in here for another 6-9 months.

My understanding is that banks will work with the renter if the house is foreclosed on. I wouldn't buy it unless we could buy it for what the owner owes on it. It needs new flooring, cabinets, kitchen counter tops and paint right off the bat.

In order to be protected some what from BOA, should we write another contract for 6 months? I'd hate to have to find another house, move, just to move again when the new house is ready.

Thoughts?

where's all your rent money going?!

To the owner and down the tubes. I've not talked to him about. Just surmising after getting all the BOA stuff.

Probably why the bank wants to talk to you.

If the bank now owns the house, rent should be sent to the verified owner.
In order to pay rent to the proper party you will need documentation from BOA with proof that foreclosure has been finalized.

Have they addressed these letters using your name? Or are they fishing for easy money.
What did the LL say (in certified writing)?
Couldn't you get another 6-month lease from him in the meantime? The bank may have to honor that.

Until then, they could pound sand (depending on how much risk you want to take).
Eviction might be quick 'n dirty in SC, but it will still cost them.

BOA hasn't contacted us. They've been sending the info to the house, as they obviously think he lives here.

I have to admit, I did open a FedEx envelope after receiving a dozen of them and putting them in the mailbox for him. This one he didn't pick up so I opened it. It was basic information for HO's who are behind in their mortgage. Said he owed about $200k. House would probably sell for $350-400k. Who knows if he has a second or third mortgage on it.

If I could buy it and flip it, I would. Just no interest in living here long term.

My thought was with a six month contract, the bank couldn't force us out. At least not until the contract is up, but by then, the new house should be built.

It might also allow us to have first dibs on the house to buy and flip.

Some thoughts: (I am not an attny, so caveate emptor)

1). They don't know his current address and are sending notice to the wrong one.
He sounds like he is behind, dodging them for now, and might put up a small legal fight while he is still getting rent from you.
This might take time to settle.

2). It could go any direction depending on current laws/trends. I'd hazard a guess political pressure is on them to negotiate. Banks have used the big hammer and foreclosed on $5 then lost $500K on resale. They will probably go after the freshest meat in the county first. There are a lot of foreclosures out there and they might not need more.

3). Since the packages are not specifically addressed to you, they could be considered junk mail and you got rid of them from being on the porch. Right?

4). Nobody but the resident and postmaster should use the mailbox.

Have a friend here in LV, with a similar situation. Rented a Condo in the Marie Antoinette HR in early 09, unit got foreclosed upon in early 2010. Friend did research found the bank holding the mortgage and contacted them. NO GO they would not even talk to him, and as he no longer has anywhere to send a rent check....HE HAS LIVED IN THE CONDO FOR 4 YEARS WITHOUT PAYING RENT.

The bank probably doesn't even know my friend exists, and that they think the unit is vacant?

It seems no body cares?

There is a lot of shadow inventory sitting out there...some of it is owned by the FED.

One only can imagine how much inventory is sitting on the books for a bank to not even care?

Now folks tell me everything is just swell.

Make an offer on what its owed on it when they foreclose. Around here, there will be all kinds of people banging on your doors for months already.

That happens a lot. Banks probably are probably satisfied to have someone watching the property and paying utilities. Abandoned homes rapidly deteriorate.

To OP, if not forclosed, its probably easier to offer current owner enough for a clean closing, to pay off loan. They get out of dept, the bleeding stops. If they won't sell, I'd probably stop paying rent (burn up your security) and look for a new place to live.

Had this happen to me a few years ago. I'll preface by saying laws vary by state and can only share how things shook out in VA. Anyway, the bank wanted me out of the house NOW and threw an eviction notice on my front door. At that point, I was going month to month with the property management company since they were aware of the foreclosure as well and didn't want to write a contract that would be a problem child.

I consulted with an attorney on the matter. The original lease included an automatic renewal clause that turned out to be key, even though it wasn't being enforced by the prop mgmt company; they were out of the picture by now anyway. My attorney gave me guidance that I should tell the foreclosing bank that I wanted to finish out my lease; that if they wanted me out now, I'd make it expensive for them. Not only with legal costs but apparently, tenants in VA can demand a cash payment to 'make them whole' for the inconvenience. The bank backed off.

Btdt...... everything is fine and dandy, everyone is on agreeable terms........ until the sheriff shows up and gives you 3 days to vacate the property because the bank sold it......month to month doesn't mean **** when the person you're paying doesn't actually own the house. ..
My advice. .... get out now........

Edit: big differences state to state reguarding the laws..... Talk to a lawyer. .

Even if it is foreclosed on, the bank can't force you out without a long process. Your rent money is most likely going directly into the owners pocket while he doesn't pay (which is illegal, btw) but that isn't your concern. You are paying the rent and that is your home. They can try and evict you but the process will be long and drawn out, especially if the bank is the owner. Tabs is right, Ive known people who lived in foreclosed houses for months without paying anything. Banks dont seem to care at all.

I would go to your local court house, do a search of your landlord's name, and get a copy of the foreclosure documents. Then I would set up an appointment with an attorney who specializes in foreclosures, take the papers in, and have him advise you. It shouldn't take more than half an hour.

Your banker can find out which attorney your bank uses for its foreclosures.

Thanks for the help guys!

Just wanted to update:

I've got a call into the owner, but haven't heard back yet.

Called BOA and they were as helpful as a kick in the nuts. Told the guy at BOA I had a contract with the owner, was renting the house and making payments to the owner, my concerns the house was going into foreclosure and I didn't expect to be kicked out with three days notice. He said if it was foreclosed on I would have three days to move out. Asked about the contract and he said I could stay. :rolleyes:

BOA guy said there was nothing he could do. He could not access the account or attach my concerns to the account. I asked about buying the house if it was going into foreclosure and he said I could bid on it on the court house steps if it got foreclosed. I said wouldn't it be better to have a buyer in hand and he said that it doesn't work that way. Another :rolleyes:

Any ideas on how to handle BOA?