Landlord Underwater? What To Do If You’re Renting A Foreclosed Home
LOS ANGELES (CBS) — What happens when you’re renting a house and the owner goes into foreclosure?
That’s the question more tenants face as landlords are struggling to pay their mortgage — and some even deciding to ditch their payments altogether.
With an estimated 28 percent of U.S. homes now underwater in their mortgages, owners have opted for a “strategic default” when the property becomes worth less than their mortgage balance.
Researchers at MoneyTalksNews.com advise renters in such situations to continue paying rent until told otherwise by the owner.
Any failure to pay rent could be considered grounds for eviction.
Also, speak to a lawyer before making any decision on how to proceed with your landlord. Renters’ rights and foreclosure issues are often highly complicated and could leave you vulnerable to legal action.
And above all, don’t panic: the lender cannot legally force you out of the property until the foreclosure process is complete.
In fact, some banks may even consider renting the property directly to you instead of putting it up for sale in a increasingly gloomy housing market.