Sadly, the current tenants occupying those investor-owned homes find out that the owner or landlord did not make the payments on their mortgage until a real estate agent knocks on their door and tells them that their home went into foreclosure and the bank, the new owner, needs to sell their home a.s.a.p. and that they need to leave the property immediately.

Why do some investors or landlords never informed their tenants that they are in default?

The answer is simple, because the investor/landlord still wants to keep on collecting the tenant’s rent for the 6 / 7 months foreclosure period. This is their last chance to squeeze some money out of their failed investment.

At the end, who ends up being hurt in these scenario is the tenant who was never informed about their home going into foreclosure and who was not offered a chance of saving money to pay for a rent deposit and a 1st months rent for a new place.

What can you do to protect yourself from a landlord who is in default and does not want you to know?

There is a couple of things you can do to protect yourself…let’s see at some options:

If you, as the tenant, suspect at any time that the landlord is in default, you can confirm  if their is a “Notice of Default”  (NOD) recorded against the property by calling a title company and by asking them to check for you if they see a Notice of Default recorded against the home. Keep in mind that Notices of Default are public records so anybody with the right information can find out if a property is in default or not. Keep also in mind that only after 3 or 4 months after non-payment of the mortgage premium, a Notice of Default is recorded against a property. So, you might want to keep on checking every month until the title company can actually confirm you that there is a Notice of Default.

If you don’t know of a title company, you can call the title company we use which is Old Republic Title Company by calling their property information line at (800) 718-4853. They might ask you who your “title rep” is… …and… for that matter you can tell them “Jorge Mesa” who is also our title rep. If they ask you if you work for a real estate office, simply tell them that you are a real estate investor and that you work from home.

When calling, simply ask them to check for a Notice of Default on a property, they will ask you for the county where the property is located and the address.

After you find out that the landlord is in default, it’s time for you to face your landlord.

Nicely ask you landlord if they are actually in default. Depending on their personality, they might actually accept it, deny it, or they will simply feel embarrassed about it.

Express them how empathetic you are about their situation and then tell them that since they will loose the house anyways and they no longer need to pay their mortgage, to let you leave in the house for FREE for the remainder of the foreclosure process which is 111 days after the recording of the “Notice of Default”  (California)

These should give depending on how behind the landlord is, 2 or 3 months to save your rent to put it towards a new 1st month rent and a deposit if you are asked for one.

If the landlord does not want to cooperate with you and let you live for free and lies to you and tells you that they took care of everything, kindly ask them for proof that they already cured the default  and that everything is fine otherwise, you might be exposed to some serious trouble.

Things might even get out of hand and the landlord might threaten you to evict you.

Hopefully that will not be necessary but if that’s the last option, you as a tenant still have rights and could even fight the eviction back.

For that, we ask you to read another article we wrote about the eviction process and foreclosure and you can read it by following this link:  http://www.realtorspeaks.com/eviction-process-after-foreclosure/

These article also applies if you as the tenant never found out that your landlord was in default and you discovered that your home went into foreclosure without you even knowing.

Hopefully this information will help innocent tenant victim of their landlords.

Thank you for visiting our web-site!

Jerry & Yolanda

Real Estate Professionals

P.S.  Even though the recommendations we tell you might be practical and helpful for you to do, we strongly advise you to seek for legal advise as we as real estate professionals, NOT attorneys, and are not qualified to provide you legal counsel. 

What options are available for people who is behind in their mortgage payments and would like to avoid loosing their home and stop foreclosure?

Briefly described are the most practical ways you can stop foreclosure in California in today’s market:

SPECIAL FORBEARANCE

Your lender may be able to arrange a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments.

• For borrowers who have incurred a short term financial hardship and are two or more months past due.

• Borrowers must be able to show that they can afford their current mortgage payment in addition to a new re-payment plan to bring their behind payments up-to-date.

• If you are able to pay an additional $600.00+ (Estimate) on top of your currently mortgage payment and you no longer have a hardship, then this could be the way to stop foreclosure.

• Borrowers must show paperwork (Lite Doc) to prove they can afford their mortgage payment and their new payment plan.

• If you would like free assistance, you can get it from a non-profit organization called HOPE by dialing (888) 995-4673

PARTIAL CLAIM

Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current.

You might qualify if:

• Your loan is at least 4 months delinquent but no more than 12 months delinquent.

• You are able to begin making full mortgage payments.

When your lender files a Partial Claim, the U.S. Department of Housing and Urban Development will pay your lender the amount necessary to bring your mortgage current. You must execute a Promissory Note, and a lien will be placed on your property until the Promissory Note is paid in full.

The Promissory Note is paid in interest-free and is due when you pay off the first mortgage or when you sell the property.

PRINCIPAL REDUCTION REFINANCE

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