Imagine that the following scenario unfolds as you take a routine morning walk to retrieve your mail. Upon opening your mailbox, you find a notice that the bank is in the process of foreclosing on the rental house where you live. You have only been there for two months and you have a six-month lease. What should you do?
1. Contact the bank, or other lender, and let them know that you are currently living there and that you possess a valid lease.
2. Call your landlord and learn about his situation. He might already be on top of it and may be able to provide you with answers. If so, you can best support him by keeping up with your rent payments. If he is uncommunicative, you might need to follow the situation through local media channels or through the bank that sent the notices.
3. Continue to stay up to date on your rental payments regardless. If you have a valid lease that has not yet expired, in most cases you will have the right to continue living in your home until the foreclosure is complete.
4. Hire a lawyer to help you outline your rights and to attempt to recoup any deposits or outstanding rent that may be owed to you, should you be forced to move quickly.
5. Understand that there is a distinction between a foreclosure and the landlord selling the property while you are living there. If it is a sale, the new owner becomes your landlord.
In most foreclosure situations, once the procedure is complete, the bank or other lending institution will likely want to sell the property. Contrary to what you might expect, banks, typically, do not wish to be landlords. In many cases, once you have received a foreclosure notice, it is advisable to start looking for a new home. Your lawyer can help you to move through this process with a reasonable amount of grace.
It is important that you do not ignore the proceedings and try to ride it out. By doing so, you are failing to acknowledge receipt of the notices and are not using the time granted to you effectively. This time should be used to make plans to take care of your household. It is critical that you keep up with your obligations, as this will reflect well on your credit rating and help you in your search for a new home. If you are in arrears or you do not have a lease, be prepared to move quickly from the residence.