renter in a forclosure unit

[csr_sd]

My girlfriend received a bankruptcy notice today, naming her as a creditor, as she rents from an owner that is heading for bankruptcy. According sdlookup, the owner is in foreclosure for at least two properties within the subdivision (carmel trails, in RB). The properties NOD dates are 8/08/07, and 10/15/07

What should she expect? Given the bankruptcy We can think only that

a) the owner has spent her deposit,

b) she will soon be evicted by the trustee.

If it is the former, it is unlikely that she will be able to recover her loss (is this tax deductible), given the number of creditors.

c) If it is the latter, her rental agreement is now (m-to-m) given her 2 years of residency, Will she only have a month to get out? Can she talk with the bankruptcy trustee and try and stay.

Any info would be appreciated, and I am certain others may get in this situation.

As an aside, the two units I know were purchased mid to late 2004 for about 289-299K for 1 bdrms, My gfs rent was 1195 and raised to 1250 over 2.5 years. Defintely a get rich quick flip.

Any thoughts would be appreciated.

cheers

csr_sd

[ucodegen]

I would go with:

c) If it is the latter, her rental agreement is now (m-to-m) given her 2 years of residency, Will she only have a month to get out? Can she talk with the bankruptcy trustee and try and stay.

Because the primary lender on the property is in first order of succession for recovery of funds. She is down on the bottom. She should take the approach with the lender that having her as a tenant means that the property would be taken care of and there is significant less chance of vandalism while the bank goes through the foreclosure process. She should also bring up that this now puts her in a position where she may need to look for a new place on short order, so a rent reduction may be in order.

You may want to get both lenders and owner in the same room and determine who the rent payments go to. With the landlord in default, I don’t think the banks would like continuing funds to be directed to the landlord.

[bonfire]

That happend to us in the last bubble burst in the 90’s. A rep from the lender just knocked on the door of our rental condo in La Costa, and gave us a notice asking us to move in 30 days. The bank offered us compensation enough to pay deposit on another rental (this time an apartment, from a legitimate business!) and the first month’s rent. We didn’t have a lease. You might be able to negotiate for more wih a lease. We had only been in the place for about a month, just long eough to get upacked. It was a creepy feeling knowing we’d been scammed by the “landlord”, who had all our personal information on the rental agreement. At that point we just wanted to get out of there. I doubt you can negotiate with the person who is being foreclosed upon. Your deposit is most likely spent. Just move on with your life The wolves are starting to come out again.

[lindismith]

There have been a few posts like this recently. You might try the search feature on the site, and see what the other advice was.

[lindismith]

There have been a few posts like this recently. You might try the search feature on the site, and see what the other advice was.

[lindismith]

There have been a few posts like this recently. You might try the search feature on the site, and see what the other advice was.

[bonfire]

That happend to us in the last bubble burst in the 90’s. A rep from the lender just knocked on the door of our rental condo in La Costa, and gave us a notice asking us to move in 30 days. The bank offered us compensation enough to pay deposit on another rental (this time an apartment, from a legitimate business!) and the first month’s rent. We didn’t have a lease. You might be able to negotiate for more wih a lease. We had only been in the place for about a month, just long eough to get upacked. It was a creepy feeling knowing we’d been scammed by the “landlord”, who had all our personal information on the rental agreement. At that point we just wanted to get out of there. I doubt you can negotiate with the person who is being foreclosed upon. Your deposit is most likely spent. Just move on with your life The wolves are starting to come out again.

[bonfire]

That happend to us in the last bubble burst in the 90’s. A rep from the lender just knocked on the door of our rental condo in La Costa, and gave us a notice asking us to move in 30 days. The bank offered us compensation enough to pay deposit on another rental (this time an apartment, from a legitimate business!) and the first month’s rent. We didn’t have a lease. You might be able to negotiate for more wih a lease. We had only been in the place for about a month, just long eough to get upacked. It was a creepy feeling knowing we’d been scammed by the “landlord”, who had all our personal information on the rental agreement. At that point we just wanted to get out of there. I doubt you can negotiate with the person who is being foreclosed upon. Your deposit is most likely spent. Just move on with your life The wolves are starting to come out again.

[ucodegen]

I would go with:

c) If it is the latter, her rental agreement is now (m-to-m) given her 2 years of residency, Will she only have a month to get out? Can she talk with the bankruptcy trustee and try and stay.

Because the primary lender on the property is in first order of succession for recovery of funds. She is down on the bottom. She should take the approach with the lender that having her as a tenant means that the property would be taken care of and there is significant less chance of vandalism while the bank goes through the foreclosure process. She should also bring up that this now puts her in a position where she may need to look for a new place on short order, so a rent reduction may be in order.

You may want to get both lenders and owner in the same room and determine who the rent payments go to. With the landlord in default, I don’t think the banks would like continuing funds to be directed to the landlord.

[ucodegen]

I would go with:

c) If it is the latter, her rental agreement is now (m-to-m) given her 2 years of residency, Will she only have a month to get out? Can she talk with the bankruptcy trustee and try and stay.

Because the primary lender on the property is in first order of succession for recovery of funds. She is down on the bottom. She should take the approach with the lender that having her as a tenant means that the property would be taken care of and there is significant less chance of vandalism while the bank goes through the foreclosure process. She should also bring up that this now puts her in a position where she may need to look for a new place on short order, so a rent reduction may be in order.

You may want to get both lenders and owner in the same room and determine who the rent payments go to. With the landlord in default, I don’t think the banks would like continuing funds to be directed to the landlord.

[Anonymous]

You need to contact the Lender directly and notify them that this is a rental unit.. This will enable you to know the likelihood of you getting kicked out and a potential timeline.

What the Landlord is doing currently is highly illegal… This is called “Equity Skimming” and is punishable by law.
Meaning they are taking your money and not paying the bank.
There were a bunch of property management companies that did this in the 90’s.. Approaching homeowners that get NOD’s and saying they will rent out the units and pay the mortgage… They then rented the units as a property manager and never paid the bank, pocketing the money and then allowing the house to be foreclosed on. Screwing the bank for months.

If you are unable to find out a timeline of foreclosure you may want to contact a lawyer.

[Anonymous]

You need to contact the Lender directly and notify them that this is a rental unit.. This will enable you to know the likelihood of you getting kicked out and a potential timeline.

What the Landlord is doing currently is highly illegal… This is called “Equity Skimming” and is punishable by law.
Meaning they are taking your money and not paying the bank.
There were a bunch of property management companies that did this in the 90’s.. Approaching homeowners that get NOD’s and saying they will rent out the units and pay the mortgage… They then rented the units as a property manager and never paid the bank, pocketing the money and then allowing the house to be foreclosed on. Screwing the bank for months.

If you are unable to find out a timeline of foreclosure you may want to contact a lawyer.

[Anonymous]

You need to contact the Lender directly and notify them that this is a rental unit.. This will enable you to know the likelihood of you getting kicked out and a potential timeline.

What the Landlord is doing currently is highly illegal… This is called “Equity Skimming” and is punishable by law.
Meaning they are taking your money and not paying the bank.
There were a bunch of property management companies that did this in the 90’s.. Approaching homeowners that get NOD’s and saying they will rent out the units and pay the mortgage… They then rented the units as a property manager and never paid the bank, pocketing the money and then allowing the house to be foreclosed on. Screwing the bank for months.

If you are unable to find out a timeline of foreclosure you may want to contact a lawyer.

[Author]

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