By letting renters stay in those homes, instead of evicting them, Fannie Mae can leave those properties on auto-pilot and worry about the rest. Also, as someone who has considered buying rental properties, an occupied property is more valuable than a vacant one. Fannie Mae has pledged to change that with its new renter policy starting this month. 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 move. 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.
This scenario is becoming all-too-familiar for thousands of renters nationwide. Unintended victims of foreclosures are dealing with problems first hand due to the failing economy. Biggest question we have is why one legal document (the mortgage) trumps another legal document (the lease) and what renters recourse is. Will they ever get their money back??? 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.
Such displaced renters are usually in the dark about the financial situation that led their landlords to foreclose. But Carreon has a window into the particulars behind his situation because of his contact with law enforcement in this case. That’s often the first indication of trouble for renters. Sher also encourages tenants to open mail that comes addressed to “occupant,” since sometimes foreclosure notices will be mailed that way. Legally speaking the renters lose their tenancy rights with the onset of foreclosure. Usually tenants have to move out within 30 days of being served notice.
Hopefully in the future landlords will be required to disclose their financial troubles for the benefit of renters. What makes the situation particularly awkward is even though a renter may be in good financial standing, he or she may still wind up being penalized. Even worse, landlords often continue to find new tenants for vacant properties even after foreclosure proceedings have begun in some kind of effort to repair their finances. Other renters might be in a bad way but this one has six months of rent plus a thousand dollars. I wish I could live somewhere for six months rent free and then someone give me a thousand dollars on top of that.
Typically, tenants are given 30 days to vacate the premises – something that’s already happened to a number of Bula Enterprises renters. Therefore let the renter beware, and research the status of the space he/she/they are about to occupy. Is the landlord solvent? And renters are getting the real brunt of the beating. Up until very recently tenants in some parts of the country had as little as 3-days to vacate the premises of a foreclosed property after being notified by the financial institution taking possession of the property due to defaulted mortgage payments.
