Renters should receive a notice when their landlord’s mortgage is being foreclosed. It will list the date of the Sheriff’s sale or auction. In states with a statutory redemption period, the existing renters may continue to pay rent to the landlord and live in the home until the statutory redemption period ends.
With so many renters being displaced due to foreclosures, many states have extended the length of time the renter has to move after they receive an eviction notice. You may want to contact local agencies to determine the applicable time frame in your state. Typically, the eviction notice goes into effect on, or before the last day of the redemption period.
In Minnesota, once the foreclosed property is owned by the REO lender, a two-month written eviction notice must be given to the renter. During this time, the REO lender may offer to lease the property to the current renter on a month to month basis. Rent is charged at the current market rate. If the renter does not want to continue to rent, a cash incentive to vacate is commonly offered, known as “cash for keys.”
This week, Fannie Mae announced a new policy that applies to renter occupants of foreclosed properties when Fannie Mae acquires the property. Renters of any type of single-family property (including two to four unit properties, condos, co-ops, single-family detached homes, and manufactured homes) are eligible. They may lease the foreclosed property on a month to month basis, or receive a financial “transitional” incentive if they choose to relocate. http://tinyurl.com/Rental-Policy
What happens if the landlord purchased the property on a contract for deed? Once default occurs, if the landlord doesn’t pay the amount due in 60 days, the contract is cancelled. Unlike a mortgage foreclosure, there is no statutory redemption time period in a contract for deed. We are starting to see more states intervene and extend eviction notices from a couple of days, to two months. Make sure to check your local/state rules.
Filed under: General | Tagged: cash for keys, contract for deed, eviction notice, Fannie Mae, foreclosures, landlord, renter's rights, renters, REO lender, Sheriff's sale, statutory redemption period
