Help Will I be Homeless?

[iwant2getthem]

I need some help. I am distraught and not sure where to turn. I am a victim of the mortgage meltdown an have never missed a payment. I have been renting a house for th elast 6 months. i never missed a pyament nor was ever late. I come to find out howver, the home as of today reverted back to the bank via a foreclosure sale. The state I live in has a 6 month redemption period so I think I would be okay for the next few months. I think.

I am not quite sure what to do. Worse, the woenr called today an asked why she has not received payment. Do I have to pay them even though as of today they no longer own the house and are in breach as I have a two year lease now have to tr an save up to get money for a new place?

My questions are:

1. Do I still have to pay my monthly rent? If so, can I pay an escrow account hoping that I will end up with the money in 6 months?

2. Should I try to negotiate with the landlord for a reduced amount until I could find a new place?

I have not had piece of mind since I moved in but love the house. Once I found out the home was in foreclosure I tried to wokr with the owner on a short sale. Now I did all they asked and they claim it was denied. I do not beleive it was even submitted. I want to try and buy the house from the bank if I can. I am lost and scared I will be homeless due to no fault of my own and need some guidance Please.

[pointman]

iw2gt, That's an interesting and undoubtedly a widespread situation. You won't be alone in that respect. I just wish I knew the answer.

There are probably some folks here who do know of state or local renter laws that might apply to your situation, however; you may not get a response because they don't know where you live and they probably won't risk a response that may not apply to you...

Kindly update your profile to include at least your home state and that might help generate some replies. It's worth a shot.

Good Luck!

[Gravity357]

I need some help. I am distraught and not sure where to turn. I am a victim of the mortgage meltdown an have never missed a payment. I have been renting a house for th elast 6 months. i never missed a pyament nor was ever late. I come to find out howver, the home as of today reverted back to the bank via a foreclosure sale. The state I live in has a 6 month redemption period so I think I would be okay for the next few months. I think.

I am not quite sure what to do. Worse, the woenr called today an asked why she has not received payment. Do I have to pay them even though as of today they no longer own the house and are in breach as I have a two year lease now have to tr an save up to get money for a new place?

My questions are:

1. Do I still have to pay my monthly rent? If so, can I pay an escrow account hoping that I will end up with the money in 6 months?

2. Should I try to negotiate with the landlord for a reduced amount until I could find a new place?

I have not had piece of mind since I moved in but love the house. Once I found out the home was in foreclosure I tried to wokr with the owner on a short sale. Now I did all they asked and they claim it was denied. I do not beleive it was even submitted. I want to try and buy the house from the bank if I can. I am lost and scared I will be homeless due to no fault of my own and need some guidance Please.

Never assume you are going to be alright for 6 months or whatever. First thing I'd do is check with to see if there is a local non-profit that can give you advice. Secondly, I'd just find a new place.

[KimPossible]

This exact same think happened to my mother in 1989. She had moved in to a duplex while waiting on her house to be built. 3 months in to the lease she got a letter. So you know that at the time of the lease signing, things were already going awry. Anyways, in Texas, there was nothing she could do. Luckily the bank allowed her to stay the remaining 3 months till she was ready to move. But that was something she had to set up with the bank directly as they were then the legal owner. I would contact the local housing authority and see if they have any information or can route to the proper people.

[iwant2getthem]

Txs everyone for the replies. I live in Michigan if that helps. My question is now the bank owns the home even though it is in the redemption period, do i still have to make the payments?

1. How can they legally collect when they are no longer the legal owner,

2. they breached the contract by not paying the mortgage on the home,

I will bear costs I do not think I could afford.

3. What about my security deposit? It was supposed to be put in a separate account (the move in sheet had the bank info where it was deposited and obviously they cannot deduct anything for the condition of the home since they dont own it) when I moved in per MI law, will I get that back?

I have never been so scared. I know I have made my share of mistakes, but to be homeless when I never missed a payment is not fair esp at the holidays.

[Rick9972]

I am not a expert but know a little about the housing industry so here are my suggestions:

1. First and foremost is to calm down. The absolute worse thing that can happen is you have to move in a couple of months.

2. Secondly move on with the understanding you have a new landlord and this is the bank. You need to talk with them. If you have a decent relationship with the previous owner, you could ask him who was handling the account with the bank. Otherwise, call the bank and ask for the department that handles bank owned property. Tell your story and sooner or later you will get to the right person.

3. After/if you get the name of the bank officer from the previous owner demand your deposit back. Probably will not get it, but ask and then follow up with a letter demanding the return. I would bet you will have to go to small claims court to get it back, but sometimes you get lucky.

4. Discuss with the bank about your living in the home, where you send payments, getting a new lease etc., tell them about your deposit that the previous owner still has. Not sure, but I believe technically the deposit should have transferred with the ownership change.

5. Since the property did not sell at the foreclosure sale, the level of interest in the property is not very high. This is to your advantage. Mention to the bank officer you are interested in purchasing the home and ask if your short sale offer was ever presented to the bank.

6. DO NOT appear scared/nervious/over excited about the situation. Take the approach that this is simply a business matter that has to be dealt with in the fastest most professional manner possible.

7. The bank's position is that they now have a property that they do not want, and they want to make money off it. As stated in #5 dicuss the possiblity of you purchasing the property, but you probably will not get a decent offer from the bank for about 6 months. Right now the bank is still hoping to recoop all the money they lost. It will probably take that long for their thinking to switch from trying to make money to taking what they can get to be rid of the property.

Hope this helps.

[iwant2getthem]

Thank you so much for the answer. So would I make the payment which was de the first to the "owner" or put it into escrow until I figure things out with the bank? Do I no longer deal with the "owner" who lost it to the bank?

[1time2many]

Put the money in a escrow account until you figure out who to pay it to..... Do Not pay the origional landlord if no ownership exist.

You will probably find that the bank does not want the house to set empty when they have a chance to recoup some funds from rent.

You should also consult a local lawyer that deals with real estate. There is a bill in congress now that addresses this exact issue.

[iwant2getthem]

UPDATE:

The Landlord called me today and told me "I have to make the payments as they (he) is still the owner by right until after the cure. I must continue to make all the payments or I will be hit with late fees etc." And, the best of all, "they will do a walk through before the end of the 6 months to see how much of the security deposit I will get back." even though it reverts back to the bank.

Now what?

[1time2many]

Did you receive a letter from the bank thats states that they own it?

If so do Not pay the former owner.

You realy need to talk to the Bank to see if in fact he is still the legal owner, if he is not he certainly cannot come after you for squat.

You might send him a CMRR letter telling him that you have escrowed the rent until you get clarifacation of ownership to CYA.

[iwant2getthem]

No I actually found out intially cause a forelcosure sale notice was posted on the door. I went to the actual sale yesterday and no one bought it as they actually had a second and third on the property as well so even if someone bought it they would have had to deal with them. It reverted back to the bank as the owner but the landlord has the right to redemption within 6 months for the full amount + 2nd and 3rd which is doubtful they will do as that number is 3x the homes worth.

I actually went and got a pre-approval from a mortgage company to try and buy the ouse before the foreclosure sale. I guess now it is better it didnt. I had been going through the landlord supposedly to present the info. They said the bank turned it down 2x but I am starting to suspect it may have never been submitted esp since the LL is adamant about getting the monthly payments. I dont know. I just do not want to be homeless unexpectedly and know my payments arent going towards the house and frankly I should not have had to endure what I have being there.

[Methuss]

This is the poop on it. And I ran this past my BK lawyer first, so it is accurate.

#1 Your contract is with the landlord. The bank has no obligation to honor it whatsoever.

#2 The landlord is partially right. They retain posession of the deed until the redemption period is over (they no longer own it)

#3 The landlord is right. You must still continue to pay your rent even though there has been a foreclosure.

#4 You are right. The landlord has an obligation to return your security deposit when your term is up.

#5 This sucks but the landlord gets your rent and can technically pocket it in full.

#6 Bet me. The landlord will file for bankruptcy 30 days before the redemption period runs out after taking all your rent money.

#7 If the landlord does go BK, your security deposit does NOT belong to him. You contact the trustee to have it siezed and returned to you in full. It is your property being held by the landlord. You are not obligated for damages to the landlord if they no longer own the property.

#8 If your lease is not going to expire before the redemption period ends, then the day it does, your landlord is in breach of the agreement and you can sue him (if he hasn't already filed bankruptcy). Breach of the agreement entitles you to a full return of the security deposit.

This is yucky medicine and I hate to say this but your landlord is an unscrupulous scumbag by demanding rent knowing he isn't planning on paying the debt obligations on the building.

[Donna47129]

This is my 2cents:

The bank may not have to honor your lease, but that doesn't mean that they won't.

I'd contact them and talk to someone in charge before I paid the landlord anything.

Personally I'd sit on the money and only pay it if a court ordered me to all the while trying to work something out with the bank. What's the landlord gonna do, persue eviction? He'll be out of the picture before he could get you out.

Why give that scum money?

[iwant2getthem]

Methuss-

Thanks for the response. My term lease expires June 2008 then becomes mo-mo at my option for 1 year. It is "unusal" they were able to get a huge 2nd then a 3rd when they were already behind. Regardless, I do not know if the bank will come in and kcik us out or even when the redemption starts. I spoke with the original listing agent (who of course is no longer in the industry) who said he thinks it may be some "funny things you read about in the paper" but would not elaborate further. We are the ones put out here. I equiate it to buying a car and paying the party who stops paying the lien holder and still tries to collect. The realtor recommended setting up an escrow until we find thinsg out as he does not feel the owners had a valid claim any longer and would have to go to court to sue for the money even though they are in breach and basically ruined things for us. I am lost and appreciate everyones well thought out replies. It sucks.

[Methuss]

The redemption period begins on the day after the foreclosure sale. If your lease is up in June 2008, then your last month does NOT get paid to the landlord. At that point they no longer own it nor have posession of the deed.

My advice is to consult with a lawyer yourself. The initial consult is usually free. Even so, the landlord may back off if he gets a strongly worded letter from a lawyer representing you. That would be worth the $125 retainer alone.

As a landlord, I can tell you that it takes anywhere from 30 to 45 days to get a tenant out on an eviction proceeding. Sometimes longer. Even the bank has to go through this after the redemption period, because you are in posession of the property. Remember posession is 9/10 of the law. A judge has to award possession to another party before the sheriff can force you to move.

[iwant2getthem]

Txs Methuss.....the whole thing is frustrating as I was supposed (and planned to) to be in the house until June 2009. I never missed a payment nor was late and proud to say so. Now the owner who has put me through hell stressing about this wants me to pay them when they milked every dollar and 5x that on the house an is not making payments? I would rather send the money to the bank than to them.

Would it be worth my while to maybe offer the landlord a much lesser amount on the rent knowing they are not paying anything and I will not fight them in court?

[Methuss]

Remember what I said previously. You have a contract with the landlord, not the bank. You have no obligation to the bank and they have none to you.

If you want to do something, call the bank and tell them that the landlord is continuing to collect rent from you even though they have been foreclosed. The bank can then take measures to sieze the funds such as having a court appointed receiver.

I would not try offering less to the landlord unless you have a lawyer do it. They can still try to evict you and may succeed. It may not be for non-payment of rent but for anything else they call a breach of the lease. A lawyer may be able to arrange a legally reduced rent. But as I pointed out, this landlord is not playing by honest rules. You can expect backlash if you don't play along.

[merkurfan]

I also suspect if you bug out early, this same land lord will have you in court for breaking the lease. (go figure huh?)

I would talk with the bank, since the house went up for sale and no one bought it (shocker... no.. not really) it's VERY likely the bank might be intrested in keeping you in the home after they take over. After all, someone living in the home does a lot for them. #1, it gets them $$, #2 empty houses look bad, vandals do mean things to them, and someone has to mow the lawn/remove snow. Might as well be you If it is a huge bank they might not have any interest in dealing with you. If it's a smaller local one I'd bet they'd LOVE the idea of keeping you in the house and likely would try to get it sold to you.

I never thought I would say this after the housing sales in the past years but.. houses are not selling. the bank knows this, they should work with you. I just had the president of my little bank call me and ask if I was still looking for a rental. my old small town bank is sitting on 25 empty homes that will be that way for a while. They are starting to rent them out if they can find tenants. To bad they are 100 miles from work.. Offered me a 4br 3 bath build in 05 for 650 a month.

Might be worth the drive..

[leaper924s]

UPDATE:

The Landlord called me today and told me "I have to make the payments as they (he) is still the owner by right until after the cure. I must continue to make all the payments or I will be hit with late fees etc." And, the best of all, "they will do a walk through before the end of the 6 months to see how much of the security deposit I will get back." even though it reverts back to the bank.

Now what?

Call the bank.. Worst case senario, the original owner still has ownership..If he/she decides to evict you it can take up to 3 months...just because someone says they own it, doesn't make it so...IMO I woouldn't pay anyone until I had proof of ownership.. I can appreciate your stress.. homeless in Michigan, in the winter?! Make the call...leaper

[merkurfan]

while calling around and trying to figure out what is going on I would be looking for a alternitive. A self storage and extended stay place or perhaps a trip to craigslist to see what else is avaliable.

[iwant2getthem]

Txs everyone. I am going to make the calls today to see where it gets me. I asked the "landlord/owner" where they had allegedly faxed the short sale info as we ll who they have been speaking with and continue to get the run around. I feel they will take my money and not pay regardless and if not, try and evict me. But I will call the bank if they try and ask the bank to be there and stake a claim to the money so if they think they are getting one over on me until I can move the bank might end up with the money. That I think is my only leverage until i can work this out.

I will keep everyone updated today. Txs for the help.

[iwant2getthem]

I set up an account today and the the monthly rent into that account. The LL , whom btw I never met and always have been dealing with his "managment company" (if he even exists or knows he owns this house as I have never met him or spoken to him) wants to come to the house and do a 'walk through" inspection." I am not sure what the purpose of the inspection as the abnk does not charge them more if the house is in worse shape when they offically take the house. Do I allow it?

[Methuss]

If you are not going to be home you can send them a letter telling them they may not enter while you are away except in case of emergency. Last thing YOU need is for them to enter, torch the place for insurance, and blame it on you as arson. But if you aren't home they can certain enter anyways without your consent (they have keys).

I say it one final time. GET A LAWYER. Have no direct contact with the landlord unless your attorney is present at this point. Unless you are prepared to face an eviction or your property being damaged or stolen (landlord is stealing from the bank, why not you too?), you will have no one but yourself to blame if you continue to try and handle it yourself and this goes south.

[Rick9972]

I fully concurr with Methuss here. The owner is up to something and you should know he probably does not have your best interests at heart.

I know of no reason why he would wish for your permission to do a "walk thru"

If he could legally do it, he would without asking. I suspect that he wants to do the "walk thru" to claim damages to steal your deposit money before the bank can freeze it.

[iwant2getthem]

Txs Methus..you are right. I am going to contact an attorney in the am. I will let the LL know they cannot come without us here. Txs for the help.