Foreclosure Scams And Renting

Foreclosure Scams: How to Avoid Them

Are you a homeowner who is facing foreclosure? If you are, you may literally be desperate. You may try anything to save your home. Of course, you are urged to do so, but it is important to not let desperation get in the way. Homeowners who do often find themselves the victims of a foreclosure scam.

When it comes to foreclosure scams, the best way to protect yourself is to know what to look for. Although foreclosure scams come in a number of different formats, many are easy to spot.  

One type of scam that you will be on the lookout for is when an individual or a company approaches you offering to help. When doing so, they will offer to provide you with a loan. The only problem is that a loan is not what you may be getting. The documents you sign may actually turn over ownership to the individual or company in question. However, you often end up agreeing to rent the property at a very high rate. When you cannot afford to make those payments, you will be evicted from a home that you no longer own.

Another foreclosure scam involves having an individual or company coming to your rescue. They will offer to negotiate with your lender for you. During this period, you are asked to pay the individual or company in question, which may be referred to as a rescuer. The only problem is that individual or company isn’t in contact with your mortgage lender at all. What they are doing is pocketing your money and you will still end up facing foreclosure.

Similar to the foreclosure scam listed above is one that involves strong-arming your home from you. In this aspect, the individual or company in question isn’t necessarily after your money, but more your property. They will instruct you not to contact anyone for help, aside from them. You are instructed not to speak with a lawyer, not to talk to or make payments to your mortgage company, and so forth. Right before the foreclosure proceedings start, the scammer will then take every step possible to get your home.  

One mistake that you will not want to make, concerning foreclosure scams is believing that the individual in front of you is different. Desperation and despair can cloud one’s judgment. If you are presented with a contract or legal document to sign, do not do so until you can have it reviewed by an attorney. Be sure to choose your own attorney. Do not rely on the advice of an attorney suggested to you, as they may be in on the scam, if they are even a real attorney to begin with.

The three above mentioned foreclosure scams are just a few that you may run into, but they do have the potential to cause the most damage and the most heartbreak. The good news is you now know what to look for. This means you can avoid falling victim to these types of scams. As a word to the wise, never agree to do business with someone who approaches you. A reputable lawyer or housing advisor will wait for you to come to them. No one who comes knocking on your doorstep is likely to have your best interests at heart.

As a recap, foreclosure scams are out there. Typically, the only way for you to legally avoid foreclosure to speak with an attorney or to make arrangements with your financial lender.  

Foreclosure: Your Options As a Renter

Are you a renter who is concerned with foreclosure? With the recent media attention it has received, you may be and with good reason. Although many renters are blindsided by a foreclosure eviction notice, others may have seen the signs coming. Whichever side of the fence you are on, it is important to know what your options are.

One of the most common decisions made by renters who have either been served with a foreclosure notice or see it coming is to throw in the towel and move. Many decide this is the safest and easiest approach to take. With that said, know that you may face a number of obstacles. Unless your landlord has received a foreclosure notice, they do not need to let you out of your lease. If this happens, you legally need to continue paying rent.  

Next, you may find it difficult or impossible to retrieve your security deposit. This may be a problem if you weren’t anticipating to move, as you may not have the funds needed to pay a new security deposit on a new property. This doesn’t mean that you will be left homeless or put out on the street. Remember that you don’t have to move until you receive a legal eviction notice. Next, talk to prospective landlords about your situation. If your current landlord can vouch that you do make on time payments, you may be able to make your security deposit in affordable installments.

As previously stated, you do not legally have to move from your rental unit until you have received an eviction notice. For that reason, many renters, especially those who were unprepared, make the decision to stay and stand their ground. If you want to do this, know that you may face some resistance from the bank or new property owner. With that said, until you receive an eviction notice, you cannot be forcefully removed from the property, your utilities cannot be shut off, and the locks cannot be changed on you.

Another option that you have is to approach the financial lender in question. Your best luck is when dealing with either a locally owned or operated bank. When dong so, you will have two different options. Ask to stay in the home or rental unit. Unfortunately, some banks will automatically start the eviction process as soon as a property enters into foreclosure. This is party due to fear that the property will not promptly sell. Many banks don’t want the hassle or liability of having to deal with a renter. If you are a long-term renter, plead your case, which should include prompt and on time rent payments.

Next, you can offer to buy the property. Even if you aren’t in the best financial standing or if you are unprepared to make the often required down payment, the lender may be willing to work with you. Once again, your chances improve when dealing with a locally owned or operated bank. If you are a long-term renter and can prove that you have made consistent on time rent payments, have the money needed to pay for a mortgage or home loan, the lender in question may be able to work with you. After all, they want to sell the property and recoup their lost money as quickly as possible.

Although some banks will start the eviction process right away, others will not. This is normally when they believe they can sell the home quickly, like in an auction. If this occurs, you may want to wait and workout an agreement with the new owner. If you are in an apartment complex or a multi-family home, your chances of being able to stay are pretty good. However, if you rent a single family home, the new buyer may intend to move him or herself in.

As an important reminder, you can always throw in the towel and start preparing to move when your rental unit is facing foreclosure, but you don’t have to. As a renter, you have a number of legal rights, as well as options.

Foreclosures and Renters: What Are Your Rights?

When you hear about foreclosures on the news or read about foreclosures in the newspaper, you will see that most of the attention is placed on the homeowner in trouble. Unfortunately, it seems as if renters have simply just been forgotten. That doesn’t, however, mean that they are exempt from foreclosure related evictions. If you are a tenant of a rental property, foreclosure should be a concerned of yours.

The most common fear of renters is coming home to a sign on the door stating that they must be out within twenty-four hours. Typically, this will not happen. Many states have laws that are designed to prevent this from happening. Although it does vary, depending on the state, banks are usually required to post foreclosure notices on the building within twenty days. These are notices that you should be able to spot.  

Another way that you can know if your rental unit is headed for foreclosure is by regularly examining listings. These foreclosure listings are easy to find online. Properties in foreclosure should also be listed and be available for viewing in your local city, town, or village offices. Although you may want to refrain from outright asking your landlord if he or she is facing foreclosure, especially if no signs are showing, it may help to calm your fears.

Even if your building is being foreclosed on, you may not necessarily have to start packing your bags. Some states make it so that your lease trumps the foreclosure. This protection often occurs when a new owner is unable to afford their mortgage. For example, is your one or two year lease with the previous owners? If you entered into the rental agreement before the mortgage in question was obtained, the buyer of the foreclosed property may have to honor your lease.

Renters are also provided with a small amount of foreclosure protection when they rent from a rent stabilized unit or when they are a part of a federal housing program. In many states, those on Section 8 cannot be evicted from the rental unit without reasonable cause, even when ownership is transferred. Some states and local governments also state that foreclosure is not a good enough reason to evict those in rent stabilized housing units. Since these exemptions vary depending on local and state governments, be sure to verify this information ahead of time.

Although you may be offered some protection as a renter, the new owner of your property may have other plans. Know that you cannot be threatened or forcefully removed from the premises until a proper eviction notice has been served. In most areas, this is not something that just happens overnight, so you should have some notice. Until that time arrives, you should not have your locked changed, have your belongings moved from the premises or have your utilities shut off. In the event this does happen, contact the authorities and a lawyer. In the event your utilities are shut off, the health department can and should be notified.

Another concern that renters have, concerning foreclosure evictions, is their security deposit. Since most rental properties require the payment of a security deposit, those forced to move unexpectedly are often left in a pinch. In all honesty, it doesn’t matter how well clean or cared for you kept the rental unit, you may have difficulty recouping your security deposit. New owners are often exempt by law from having to pay it. You can sue the previous owner, your last landlord, but this process can be time consuming and costly.

As you can see, you do have multiple options when facing foreclosure, as a renter. For more assistance, you will want to consult with a housing counselor that is approved by HUD (The United States Department of Housing and Urban Development) or a lawyer. If and when you consult with a lawyer, select one that has experience handling legal matters that concern housing and tenant rights.