housing question

Discussion in 'Community Discussion' started by dukebound85, Nov 1, 2008.

  1. dukebound85 macrumors P6


    Jul 17, 2005
    5045 feet above sea level
    so i have a question

    the house my parents are residing at is getting foreclosed on. my parents are renting the house and we were told recently that they must be out in like a week.

    is there any laws or whatnot giving renters a better headsup due to the fault of the owners not paying? like another month extension would be ideal you know?

    not even two years ago was the house my parents owned got foreclosed on as well. i hate this crap

    kind of a stressful situation at the moment...
  2. TheAnswer macrumors 68030


    Jan 25, 2002
    Orange County, CA
    I don't know about too much about the legal side, but my roommate and I were in a similar situation about 6 months ago. We were told it was going into a quick short sell, then not told when that fell through. We came home to a notice on the door.

    We were able to talk the new owners into giving us 30 days. They even gave us some money to pay for moving expenses.

    I don't know if we were just really lucky or what, but negotiation and communication with the new company really saved us from living in our cars or at my roommate's parents' house.

    Good luck to you and to them as well.
  3. Koodauw macrumors 68040


    Nov 17, 2003
    Foreclosure is a rather lengthy legal process, and eviction letters are sent out rather frequently even though they can not be legally enforced. The law varies state by state, so we would need to know what state you are in to help more. (Colorado?) You can also look up tenants rights groups in your area, they would be a very good source.
  4. dukebound85 thread starter macrumors P6


    Jul 17, 2005
    5045 feet above sea level
    yes colorado. ive been trying to look up what we can do as it seems somewhat unfair in a sense

    i just dont want to come home to a lock on the door and then have all my stuff get auctioned..... or whatever it is they do

    what a time for me to be living at home while i wait to move to NY in a couple weeks..
  5. sushi Moderator emeritus


    Jul 19, 2002

    And I highlighted a real key portion above. So you need to check out what the law is in your state.

    Note, a licensed RE broker should know.
  6. Koodauw macrumors 68040


    Nov 17, 2003
    It's funny you mention that, as the only reason I know what I do is that I am studying for my real estate license at this time. I however do not live in colorado.
  7. GoCubsGo macrumors Nehalem


    Feb 19, 2005
    As a tenant you can take the owners to court and sue them in civil court as they clearly weren't using your rent to pay the mortgage. However, as a tenant you have no rights with the lender.

    As a tenant, the lender will evict you once the foreclosure is complete. They will most likely post a notice and you will have a period of time to get out. They cannot come and remove you with force, but most lenders will offer you cash for keys. Typically the starting rate is $200 per occupant and I've seen it go up as high as $500 per.

    You will have to move your stuff out and whatever is left behind will be trashed. The amount charged to the lender for trash removal will be placed on the balance of what the borrower owes the bank on account of their default.

    In the event the house is sold at foreclosure sale to a third party (meaning the bank themselves do not own it) then the third party is within his/her right to evict you as well. Again, as a tenant you have no rights to stay there. However, as a tenant in CO you can (as far as I've witnessed myself) take the landlord to court for damages, you have been damaged.

    Foreclosure in CO:
    Colorado foreclosures primarily are non-judicial foreclosures. Meaning, they do not go through the same judicial process that states such as New York will go through. In judicial states the courts are heavily involved from filing a complaint, to allow time for an answer, having the judgement entered etc. This means that in NY, NJ, etc you can actually drag the foreclosure process out quite a bit.

    In CO however the foreclosure process (if I recall) is the lender must file for a notice of demand (much like a notice of intent to foreclose). This notice must also be published in a newspaper that reaches the entire county. The posting in the newspaper must happen once a week for 5 weeks I believe. The borrower is also mailed a notice just after the publication period begins.

    A notice of sale is also published and must be done so no less than 15 days prior to the sale date.

    The foreclosure sale must take place 45-60 days after the notice of demand (I think I have that name slightly off) is filed. So, say for example you owe your 7/1/2008 payment (this is probably the case for your landlord). Your lender will most likely give up on loss mitigation efforts after 60-90 days. Let's say 90 days because lenders are trying to play it safe. This is assuming your landlord has done nothing to prolong the default period by claiming they'll pay, repayment plans, etc. So now 90 days out is 10/1. The foreclosure probably started between 10/1 and well, yesterday. My guess is you have no less than 5 weeks and not much more than 8; safely. Once the foreclosure is completed you can give yourself a good month to go back and forth with the lender regarding evictions, cash for keys, etc. But you're going to have to move regardless. If the house is bid on at foreclosure sale (as stated previously) and a third party buys the house then they can evict you and they'll probably be slightly more aggressive. Alternatively, the third party may have purchased this as a rental anyway and you may be able to stay and just start paying that third party rent.

    Your parents can also bid on the house themselves if they're so inclined.

    The better news

    Colorado is a redemption state. Meaning, there is a period of I think 75 days after the sale date where the borrower can redeem the property. In order to do this however they must pay the sum of the loan, fees and costs in full. They have until the 50th day (check that to be sure) to notify the lender of their intent to redeem.

    Colorado foreclosures can be done judicially if the deed of trust is absent of certain verbiage that would otherwise allow for a non-judicial process to take place. Lenders most likely would prefer non-judicial foreclosures over judicial foreclosures because there is just yet another road block to getting what they need to get done within the allowable timeframe. However, if the deed of trust is lacking that language regarding the power of sale then the foreclosure must be judicial. More fees, more time, more headache for everyone.
  8. Macky-Mac macrumors 68030


    May 18, 2004
    A thought to consider.......your parents might explore whether it's possible to take over the mortgage if they can afford the payments. The current owner might be willing to turn it over in order to avoid a foreclosure on his credit report and the bank might be willing if it means they get their mortgage payments

    the situation clearly sucks for your parents so best of luck to them in dealing with this mess
  9. mrgreen4242 macrumors 601


    Feb 10, 2004
    Don't do that*. Buy it at auction! Or offer the bank something reasonable for it, even. With foreclosures at record levels and home prices falling so fast it would be crazy to buy a house at even last years price.

    Anyways, I'm curious if you/they have a rental contract? jessica. pointed out what looks to be pretty comprehensive, but I'm not sure how a rental contract would fit into that. I thought that if there's a rental contract on a property, a new owner is obligated to honor that contract as a condition of taking ownership. I would assume that would apply to a bank as the new owner as well as any other person/entity.

    *Unless of course the owner has decent equity, but if that's the case they probably wouldn't let it get foreclosed, since they have a renter in there generating at least some income off the property.

Share This Page