Home Buying in Bakersfield>Question Details

Annette Hars…, Renter in Bakersfield, CA

can a home owner rent out their house knowing it a REO?

Asked by Annette Harshaw, Bakersfield, CA Fri Aug 17, 2012

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6
Robert Savage’s answer
If the home is truly an REO then it is owned by the bank and is no longer owned by the former owner . The former owner would have no right to rent the property and would be committing fraud if they tried to do so. If your question is whether an owner can rent out their house knowing it is in foreclosure then the answer is yes, they are legally within their rights to do so. Whether it is ethical is another question all together.
0 votes Thank Flag Link Tue Aug 21, 2012
That would be stealing and misrepresentation as the owner of the property is the bank.

Renters should be doing their due diligence in these times to ascertain that the owner is the rightful landord. cg
0 votes Thank Flag Link Sat Aug 18, 2012
Ummmm . . . no. If it's an REO, then the house is owned by the bank. It's not owned by an individual, a "home owner," presumably the person who owned it before the bank took it over. That'd be fraud. Could a person sell a car that he didn't own? Could a person give away furniture owned by a neighbor?

So, no. An individual can't rent out a house (unless acting as an agent, which is not the case here) owned by someone else.
0 votes Thank Flag Link Fri Aug 17, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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This is something prospective tenants need to check, to make sure the home is not headed for foreclosure.
0 votes Thank Flag Link Fri Aug 17, 2012
If the home has actually been foreclosed on, no. The house belongs to the bank. To do so would be defrauding the tenant and you could get in a lot of trouble. If the home is simply in the pre-foreclosure state, then the answer is yes. You still own the home and you can do what you want, but you still have to be careful not to do anything that would be considered fraud against the tenant.
0 votes Thank Flag Link Fri Aug 17, 2012
If it is an REO technically you do not own the house any longer so I would consult with the Bank first
0 votes Thank Flag Link Fri Aug 17, 2012
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