bluntmoney.com

Thanks to a friend of mine, who is allowing me to share her story of foreclosure from a renter’s perspective. My friend leased a condo quite some time ago here in Arizona. It’s a nice place, in a nice area. Of course, my friend has faithfully paid the rent on time each month.

Back in April, we were talking on the phone and she said she’d had a shock that night. Here’s her story:

I came home and found a Notice of Trustee’s Sale on the front door of my rented condo indicating that my unit was scheduled for foreclosure sale in late May.

I called my landlord to let her know about the notice. She said that even though I had been making rent payments per the terms of the lease, she had missed some mortgage payments and was in discussions with the lender to try to work things out.

It sounded like the landlord was going to be able to work things out, so my friend didn’t get too upset. Still, a little caution was in order. After all, moving is an expensive proposition, and it sounded like she could be forced out with very little notice if the condo was indeed sold at foreclosure.

Here’s what happened next:

I researched AZ law and learned that when a property is sold in foreclosure, a renter is entitled to only 5 days notice before the new owner can initiate court action to evict the renter.

Talk about stress and uncertainty. But then…

Days before the scheduled foreclosure sale I read a news story that President Obama had signed national legislation providing additional protection to renters affected by foreclosure. Specifically, renters are now entitled to 90 days notice from the new owner following foreclosure. The legislation went into effect immediately — one week to the day before the foreclosure sale!

The legislation she’s referring to is called the Protecting Tenants at Foreclosure Act of 2009, and it relates to “any foreclosure on a federally-related mortgage loan or on any dwelling or residential real property after the date of enactment of this title”.

From 5 days notice to 90 days notice can make a big difference. It turns out that the foreclosure sale on the condo my friend leases did go through.

A few days after the May foreclosure sale a bank representative came to my door and informed me that the bank now owned the property and stated that the bank intended to put the unit on the market — they had no interest in becoming a landlord. She asked about my plans for moving and said the bank might offer me cash for keys if I moved out within two weeks.

I told her I had been waiting to find out the outcome of the foreclosure sale (if an investor had purchased the property, it was possible I would stay on as a renter). I briefly mentioned the federal legislation; she said she wasn’t familiar with it.

The next morning I wrote a letter to the bank’s representative enclosing a copy of the new federal legislation. I wrote the letter using materials from the excellent renter’s toolkit available on the Web site of the National Low Income Housing Coalition, nlihc.org, the organization I believe took the lead in lobbying for the renter foreclosure protection law. I sent the letter by email, fax and certified mail, return receipt requested.

On receipt of the letter, the bank representative called and left a message offering me cash for keys to move out within two weeks. I declined.

She hasn’t heard back from the bank representative to date, so she is still kind of in wait-and-see mode. At least this new legislation gives her a bit more certainty and some ground to stand on, compared with what could have easily happened before. It pays to be proactive, and to know your rights.

• 15% of California Home Sales are Foreclosures According to the Central Valley Business Times, California foreclosure sales neared $2 Billion in March.“Foreclosures sold at auction now account for 15 percent of all...
• Happy Tax Freedom Day, Americans! "America Will Work Three Days Less to Pay Taxes in 2008 than in 2007; Stimulus Rebates Push Date of Celebration Up" This is from the...
• How do i get my ex boyfriend back? How do I get my ex boyfriend back? So my boyfriend broke up with me last week because we had a few small arguements within...