RENTER dealing with house FORECLOSURE - who's been there??

[boydster]

I've been renting a nice house for the past couple years with my wife and kids. Sure, the house has its quirks and flaws, but we've enjoyed our time here. Meanwhile, I've been working with a buddy to bootstrap a business and hopefully build something to provide a lasting and comfortable future. Long story short, we are going to be continuing the business as a secondary stream of income while we work on a plan to scale and I look forward to getting back into a "real job" on Monday that I anticipate being a good opportunity for myself and my family for a more regular kind of paycheck.

Then today, I get a knock on the door from a realtor with a printout saying the house is now owned by the mortgage company and to look out for a letter from their attorney discussing the future of the property.

We're month-to-month at this point. The letter says that we can potentially continue renting month-to-month at whatever they determine to be the market value for however long it takes them to sell the property, or opt for the "relocation assistance" program where they give us a check (amount TBD) as long as you have the place in "broom clean condition" on move-out day.

Anyone else experienced this? I'm thinking it's time to move on, because if we stay month-to-month we still have to worry about getting a notice at any point saying we have 30 days to get out AND at that point there is no relocation assistance on the table. I'm not ready to buy the place. I mean, seriously, I'm about to start a new job next week... after spending almost 4 years pouring everything into building something else. In a couple years, I think I'll be in a better place to look into home ownership, but certainly not in the next couple months.

Who's been through this? What kind of timeframe did you notice from the first knock on the door until the attorney's requested move-out date? And how generous are Fanny and Freddie with the cash-for-keys relocation program?

I'm blown away right now.

 

[bfish]

I don't know Maine law….

But 1) read your lease, particular anything about termination/eviction, it all still applies.
2) The bank that owns the mortgage will want to keep you in place, unless your rent is way way under market value, I doubt it will change. It could take several months for the sale to the bank, and then several more months before the bank sells the property.
3)in most cases, once the bank sells, the new owner has to give you 30 days, then you have another 30 days before an eviction proceeding in front of a judge. After that, then you have 7-30 days to vacate (assuming you lose and you have no plans to appeal). Besides, the new owner may want to keep you as a tenant.

 

[autobaun70]

I wouldn't get too hung up on the thought of relocation assistance until you see $ figures. Typically they are only enough to pay for a uhaul at in town rates, and maybe enough for 1-2 unskilled "helpers" for a day. This is big $$$ for the typical lower end renter (mainly week to week crowd) but if you are in a middle/upper middle class setting, it likely won't be enough to give much consideration. If it does happen to be a good $ figure they throw at you, ask for them to allow you 90 days vs 30, with an allowance for you to cut that shorter (prorated to the week) if you land on the right rental and can get moved prior to the end of the 90 days, and get everything in writing.

One thing that may be on the table is a 1 year renewal vs staying month to month, at a good rate. It very well may not be much higher than what you were paying. If you are currently paying significantly under market, in all likelihood the prior owner would have already approached you for a bump in rate to help avoid the foreclosure. The advantage in having an established contract in place for the seller (bank) is that potential buyers will have an immediate revenue stream, without any marketing/turnover cost. In middle class homes, it is always worth taking slightly less than having to float 1-3 months of no income to allow for turning it over. If the market is crazy hot, this possibility might not be on the table. If this is an option, the only significant change you should expect us to be dealing with a management company if you are not currently dealing with one. The likely deciding factor to determine if this is possible will depend on if it is a property more enticing to be privately owned, or investor/landlord owned. The market will dictate which it is.

The main thing I would emphasize, don't do anything on a whim. If Maine law is somewhat normal, you should have plenty of legal protections in place to avoid having to do anything in a rushed manner.

My parents along with moms brother and sister own & directly manage about 60 properties. Some of the best renters were there when the properties were purchased.

 

[boydster]

That's good to know. Thanks for the feedback guys. I'm positive that I'm paying less in rent than market value, but I'm not in a rush to leave necessarily. However, if I see something that looks like a good deal I am feeling inclined to take it at this point as it is really just a matter of time before I need to uproot anyway.

I think it's positive thing right now though. The timing works out well for if we decide to move, and present circumstances are such that a hop over the bridge to NH could be in the cards for us which would also be beneficial in the long run. I was just so surprised when the realtor first showed up, but now that I've had some time to process I'm of the mindset that if a good opportunity to move presents itself, I'll take it, but there's certainly no rush as I have the option of still staying month-to-month for the time.