Renting a House in Foreclosure

Sometimes, a homeowner falls into foreclosure with an investment property and a tenant is currently living in the building. Especially when the landlord disappars and abandons the property, the tenant may feel very insecure during the entire foreclosure process. This is because they usually will not have any right to remain in the property if the house is sold at sheriff sale, and they are unable to talk to the lender about the loan, since they are not authorized to speak about the mortgage.

However, many tenants in a situation like this can attempt to purchase the home, even if it is after the sheriff sale. They do not have to become another victim to the foreclosure process, and may end up with a good deal on the house, without having to move out or be evicted from the property. The first question for the tenants will be who is the current owner of the property.

They will have to find out if the state's redemption period laws apply in the case of the house, or if the bank is now the legal owner of the property. This will indicate to the tenants who is the correct party to speak to about purchasing the home. A homeowner who has lost possession and ownership of the property can no longer request rent payments, or sell the property.

If the bank owns the property now, the tenants interested in purchasing can contact the lender as soon as possible to let them know the situation and that they would like to attempt to purchase the property and avoid eviction. As soon as possible, the bank will probably want to see a sales contract or proof that the tenants are working on getting financing for the property (loan application, preapproval letter, etc.).

In the case of the landlord still being the owner and having a redemption period either before or after the sheriff sale, the tenants can try purchasing the property from the landlord, if he has not simply abandoned the house. The tenants should try to purchase the property for as little as possible to get him out, pay off the defaulted loan, and get a good deal. If he's unwilling to sell in the current situation, and is working on some solution to remain in possession of the house, the tenants can wait until the redemption period has expired and then try purchasing from the bank or new owner.

If the landlord is no longer the owner anymore, though, the current lease with him is no longer any good. The bank will evict the tenants if they do not contact them and get some time to purchase the property without having to move out. Banks are generally willing to postone eviction proceedings as long as there is a strong possibility of having a buyer who can purchase the property very quickly. The tenants need to find out who is the listing real estate agent for the property, as well, if one is involved. The agent is usually someone local that they can meet with and submit their offer to purchase the home.

Getting mortgage help is a very tough process for anyone in foreclosure, but the diminished ownership rights that come with being a tenant in a foreclosed property present special challenges. However, it is very possible for rentors to come out of the situation in a better position as new homeowners of a discounted foreclosure property. They will now be the ones in control of the property and will be able to enjoy the benefits of owning the home they have lived in and had been paying rent on.

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The site also puts foreclosure victims in touch with mortgage and real estate professionals. Through a unique foreclosure leads system, these foreclosure specialists can locate several hundred more people to help each month.