TITLE VII--PROTECTING TENANTS AT FORECLOSURE ACT
SEC. 701. SHORT TITLE.
This title may be cited as the `Protecting Tenants at Foreclosure Act of 2009'.
SEC. 702. EFFECT OF FORECLOSURE ON PREEXISTING TENANCY.
(a) In General- In the case of any foreclosure on a federally-related mortgage loan
or on any dwelling or residential real property after the date of enactment of this title, any immediate successor in interest in such property pursuant to the
foreclosure shall assume such interest subject to--
(1) the provision, by such successor in interest of a notice to vacate to any
bona fide tenant at least 90 days before the effective date of such notice;
(2) the rights of any bona fide tenant, as of the date of such notice of
(A) under any bona fide lease entered into before the notice of
foreclosure to occupy the premises until the end of the remaining term of the lease, except that a successor in interest may terminate a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a primary residence, subject to the receipt by the tenant of the 90 day notice under paragraph (1); or
(B) without a lease or with a lease terminable at will under State
law, subject to the receipt by the tenant of the 90 day notice under subsection (1),
except that nothing under this section shall affect the requirements for termination of any Federal- or State-subsidized tenancy or of any State or local law that provides longer time periods or other additional protections for tenants.
(b) Bona Fide Lease or Tenancy- For purposes of this section, a lease or tenancy shall be considered bona fide only if--
(1) the mortgagor or the child, spouse, or parent of the mortgagor under
the contract is not the tenant;
(2) the lease or tenancy was the result of an arms-length transaction; and
(3) the lease or tenancy requires the receipt of rent that is not substantially
less than fair market rent for the property or the unit's rent is reduced or
subsidized due to a Federal, State, or local subsidy.
(c) Definition- For purposes of this section, the term `federally-related mortgage loan' has the same meaning as in section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602).
For example an estimated one third of homes that are in foreclosure in Arizona are rentals. This new federal law will allow these tenants to stay in the foreclosed property for 90 days as long as they are abiding by their lease terms. This new program is the same across the nation.
A lot of great information below. Assuming you were just notified by being served a Lis Pendens you should be fine with the remaining 8 months left on your lease. Always have a check completed on the status of mortgage, HOA and tax obligations when signing a lease. As a matter of practice I always have the landlord signing a declaration that they are current with all these payments.
Sorry to hear that you are in this situation and the very best of luck!
Always at Your Service,
Tom Priester e-PRO
"Results Driven Real Estate"
Keller Williams Realty
Am I correct that you found out because as the tenant and occupant of the home you were served when the loan servicer filed the Lis Pendens? That is how most tenants become aware of the situation. If the Lis Pendens has just been filed, it's possible that it could be a very long time before you have to move. Meanwhile, don't make the mistake that many tenants make and stop paying the rent. Even if your landlord stops paying the mortgage, you must still stick to the terms of your lease, and you'll want a good reference from this landlord for your next rental application anyway. I would seek the advice of a real estate attorney if it would make you more comfortable.
There aren't a lot of rentals available, and many landlords will eventually fall into foreclosure. If you ultimately decide to look for another rental, have your agent ask the prospective landlord to produce current up-to-date statements of their mortgage and homeowners association. It's still no guarantee that they will continue to pay, but at least you'll know the current situation.
Is it possible that now is the time for you to think about home ownership? If you plan on staying at least five years, it may be worth your while to talk to a qualified mortgage professional to find out how much you could purchase and what programs are available. You will even come out ahead of all those who got the First Time Homebuyer Tax Credit because since then prices and interest rates have fallen. Most likely you also have plenty of time to purchase a short sale and take advantage of the savings and the abundant inventory.
This could be the beginning of something good!
I am happy to tell you that you do have options. There is currently a law that protects you.
It's called Protecting Tenants at Foreclosure Act of 2009 (â€œPTFAâ€), bona fide tenants after foreclosure sale may be entitled to remain in the premises under their existing lease or tenancy. If you are a renter in a Fannie Mae owned property and the property has been foreclosed upon, you should have received the Fannie Mae Knowing Your Options document that sets forth information regarding some of your options. Please contact the property manager or broker listed in the document to provide information about your lease or tenancy. Bona fide tenants may also choose to sign month-to-month leases with Fannie Mae pursuant to the rental policy. Contact the property listing broker or the Fannie Mae Resource Center at 1-800-732-6643 for more information.
If you have questions concerning your rights as a tenant under PTFA or other state or federal laws, please seek the advice of an attorney. Information on legal services in your area is available through the American Bar Association at http://www.findlegalhelp.org
If you need any additional information please feel free to contact me and remember you do have OPTIONS.
Best of luck to you.
How much time do you have on your lease? You should be able to stay there until your lease runs out. In the mean time I would suggest looking for another rental or maybe even purchasing a starter home for yourself. Your mortgage could just about the same as you rent with the great deals that available on the market.
There's a new law on the books that allows you to stay X months of time if you have a bona-fide lease that was executed before they started foreclosure proceedings. I'd still look for another place and move on.
Scott Miller, Realty Assocaites, Boca Raton, FL