Rentals in Fontana>Question Details

Julie Fraulin, Renter in Fontana, CA

If a house is currently in default, what is the risk of taking over payments and losing the house even if the payments are being made?

Asked by Julie Fraulin, Fontana, CA Mon Nov 29, 2010

I have seen a friend who lived in a house for over a year and one day a letter came in the mail that the house was being foreclosed and they had to move out. They were shocked since they paid their monthly rent to a property management company. What are the chances of this happening?

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Your friends surprise foreclosure notice is a common occurrence in many states nationwide. Even though landlords are suppose to notify tenants when a property is in foreclosure and not issue new leases they do not always follow the rule of law.

To avoid a surprise eviction I strongly recommend signing up for a Foreclosure Alert Service, if you are a renter or plan to rent. This will help you to receive immediate notice if your landlord is in foreclosure or the property you are about to rent has a pending foreclosure proceeding. You can locate a servicer to provide you with this information here, http://www.worldclassmemberservices.com/foreclosureprotection.html

According to the National Low Income Housing Coalition (NLIHC), some 40% of those who experience home-foreclosure are renters, http://www.nationalhomeless.org/factsheets/foreclosure.html. Therefore, it is fair to assume that this incident of surprise foreclosure evictions though easily preventable if a tenant has a foreclosure alert service on their apartment, is common nightmare for 4 out of 10 renters.
0 votes Thank Flag Link Wed Dec 8, 2010
to piggyback on what Jimmy anwered, it is also in a renter's best interest to periodically check to see if a notice of default has been filed on a property. At least the renter will be aware of the situation and will have adequate time to plan what their next move will be.
0 votes Thank Flag Link Mon Nov 29, 2010
Unfortunately this has been common on properties that have a higher loan principal balance than the property's worth. A property in this situation is not a wise investment for the landlord to keep. As soon as the owner hits hard times the rental property is usually the first to go. Even if the tenant has made the payments on time doesn't mean the owner has made the mortgage payment. They may have used the money to catch up on other bills. Also do not trust a landlord who says they are modifying their loan. It is very difficult to modify a loan on a property where the owner does not live in. Best for a tenant to investigate if the property has equity before they rent a property. This will lower the risk of that happening.
0 votes Thank Flag Link Mon Nov 29, 2010
Whether commercial, multi family , single family home.. unless you own it yourself you are at risk.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Mon Nov 29, 2010
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