Foreclosure in Sacramento>Question Details

Theresa Moran, Other/Just Looking in Roseville, CA

I was told that if you are renting a home and it goes into forclosure the bank (or lender) will pay for your

Asked by Theresa Moran, Roseville, CA Sun Dec 16, 2007

moving expenses. Is this true?

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3
I know this isn't the answer you want to hear, but it depends. Typically, no, banks don't pay to move tenants. What happens is the deed of trust contains an assignment of rents provision, meaning when the owner of the property stops making the mortgage payments, the lender has the right to step in and demand that the tenant pay the rent to the bank.

Foreclosures can take 3 1/2 to 4 months to complete, from the time the Notice of Default is filed. During that time, the bank can collect rent and, as such, give you a notice to vacate if it so desires. If you refuse to move, the bank can formally serve you with an eviction notice, haul you into court, damage your credit report and send the sheriff out to physically remove you. Sometimes, to avoid that hassle and expense, a bank will figure it will spend less money to offer to help you move. But that's not a route most people want to go.

If your home is in foreclosure, you can call a title company and ask its customer service department to pull up the Notice of Default. Title companies are happy to help the public on a one-by-one basis. Ask for the date of recording. You can probably work out an arrangement to stay in the property for about three months after that date.
2 votes Thank Flag Link Mon Dec 17, 2007
Theresa-
I can only speak from my personal expierence and I give cash for keys to all people that are living in homes in order to get them out as soon as possible, if the tenant however, becomes difficult in terms of moving out, we just start the eviction process. I would not use it as a profit center, but a lot of banks, World Savings/Wachovia, Countrywide, etc. will offer money so you don't wreck the house.

Nick
1 vote Thank Flag Link Tue Dec 18, 2007
Hi Theresa. As Elizabeth said, the bank has no responsibility to help you move. They also have no responsibility in California to abide by an existing lease. Sometimes rather than go through a proper eviction, the bank will offer the tenants an agreed apon amount to move, "cash for keys." This speeds up the process, prevents an eviction and is usually less expensive for the bank.
0 votes Thank Flag Link Mon Dec 17, 2007
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