House Forclosure questions :P

Archived discussion from Toril-2.
Branthur
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House Forclosure questions :P

Postby Branthur » Sat Oct 21, 2006 7:44 am

OK, so some people know this already, but here's the situation that my wife and I have found ourselves in within the past couple days.

We are renting a house. Other than a landlord that didn't fix things, it wasn't a big deal (actually part of the agreement was if something got broke, we could fix it, and take the cost of getting it fixed out of our rent for that next month, so all in all not bad).

Tuesday night, the police came to our door, and served us with papers, informing us that the mortgage on the house we were renting was being forclosed on, and would be auctioned off the end of November. We've had a ton of questions, and gotten answers to some, but not all. Was hoping someone around here might have an idea or two. :P

So, if nobody buys the house in November, the ownership reverts to the bank, kind of. From what we understand, the "owner" of the house has 6 months to try to settle the account, so technically we can stay we think during those 6 months. But who actually owns the house, the bank or the "owner"? Who do we now pay rent to?

From what we understand (could be wrong), even if someone does buy the house, they can't do anything with it for 6 months, to still give the "owner" that time to try to settle things up. Is there a way that that does not happen, and we would HAVE to be out earlier than that period?

Yes, we are looking into possibly buying a house, and yes we are looking for other places to rent, but both markets suck around here right now (usually housing market is good, but it tends to die down around this time, and pick up again in the spring). The rental market around here sucks year round...it usually takes about 3-4 months to try to find someplace to rent, and that's even using church gossip to find things before they're put in the paper.
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Postby Ashiwi » Sat Oct 21, 2006 12:43 pm

Did I mention there's lots of acreage next to me for sale?
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Postby Sarvis » Sat Oct 21, 2006 2:02 pm

Could you buy the house you're living in before the auction?
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Postby Gormal » Sat Oct 21, 2006 3:51 pm

What state are you in Bran?

I'm bored so I did a quick search and it looks like this exerpt from the Chicago-Sun Times sums it up pretty well...


"In most foreclosure scenarios, the lender can nullify an existing lease, especially because most leases provide that if the property is taken in foreclosure, the lease can be terminated by the taker. If the landlady offers you a written renewal, now that there is foreclosure litigation, the lender probably could break the new lease, claiming the owner had no right to offer it. "
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Postby rylan » Sat Oct 21, 2006 4:30 pm

It really depends on the state for evicting tennants.
For example here in MA, its almost impossible to kick somebody out of a rental, even if its foreclosed upon. They get at least 6 months from the first notice, and then some kind of appeal and something else for hardshipo (can't boot someone out in the winter or if they have a baby etc).
No idea how it works in MN though.
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Postby Corth » Sat Oct 21, 2006 5:42 pm

Foreclosure redemption and eviction laws are completely state specific. You need to consult a local attorney. Where I'm at, NYC, due to backlogged courts, it can take a year or so from the commencement of the foreclosure action until the foreclosure sale itself. There is no way for me to speculate about how long the process will take in your neck of the woods.

One thing to consider.. If you are interested in purchasing the building in which you are currently living, you might want to look into the possibility of engineering a "short sale." Essentially, the owner would sell you the house for less than what he/she owes the bank. The bank would agree to take that amount as settlement of the obligation.

On the other hand, imho, RE is a very bad thing to buy in most places for the foreseeable future...
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Postby teflor the ranger » Sun Oct 22, 2006 6:45 am

I am not licenced to practice law in the State of Minnesota. If you want real legal advice, talk to a real attorney practicing in your state.

Buying property at a foreclosure auction is the riskiest way of purchasing property and if you don't know anything about the title industry, DON'T ATTEMPT THIS WITHOUT A LOT OF HELP.

Continue paying your rent until the date of auction. In Minnesota, you MAY NOT use your security deposit for your last month of rent.

Your landlord's property appears to be foreclosed upon by advertisement. On the day of the auction, your landlord loses all rights to the home except for the 'right of redemption' which allows the former owner (your landlord) to re-acquire the land by paying off the debt up to six months after the auction. Up until the day of the auction, the owner has the right to sell the property or otherwise to pay off what they owe, or to pay off what they owe.

Your lease will be transfered with the property to the new owners if it is sold off before foreclosure! It may or may not be true that in your state, in foreclosure auctions, your right as tenants transfer along with your lease contract, with the sale. In which case, the rights of the new owners to evict will be the ones stated in the lease contract (if any).

If you are over 62, blind, otherwise disabled, have a Section 8 voucher, live in a mobile home, or live in a property with 5 or more units, you may have a legal defense!

If you are on welfare, you may qualify for emergency housing assistance.

If you want to stay at the property - get a lawyer.
If you want to buy the property - definately get a lawyer or a great title company.
If you want to break your current lease, and there is no method provided for it in your lease contract -get a lawyer.
If you want to break your current lease and there is a method provided in your lease contract - get everything in writing. Signed. Notarized. Understand absoutely everything. (otherwise, get a lawyer)

If your lease contract is already over and you have the option to leave at any time, and you want to - terminate your lease through the appropriate manner and get the hell out :)

I am not licenced to practice law in the State of Minnesota. If you want real legal advice, talk to a real attorney practicing in your state.
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Postby Minofagal » Mon Oct 23, 2006 1:21 am

I think what teflor is trying to say is....

GET A LAWYER ;)
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Postby Latreg » Mon Oct 23, 2006 12:41 pm

same thing happened to me once. I think if it's not in the papers you where give already you'll get some as to whom to pay the rent to. In my situation there was a lawyer for the bank collecting all the rents and applying them to the load which makes sense. If the land lord isn't making the payments they grab the rent payments and anything left over they give to the land lord. Either way I moved out asap, I didn't want to get involved in that mess.
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Postby Branthur » Tue Oct 24, 2006 4:54 am

Just a quick update on what's goin on. :)

The bank informed us that if after the sale nobody bought it, we would still pay rent to our previous landlord until the 6 months expired. Didn't hear what would happen if someone else bought it, but that's a moot point fortunately.

We found someplace else to rent...directly across the street from our current place, actually. Opens December 1st, so we pay our rent as per normal for November, and then we're out. Gave notice today, so the huge mess that could have been is no longer an issue.
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Postby Pril » Tue Oct 24, 2006 10:35 am

Ya found a place that accepted a cat? what kind of sick sick people like cats?!?!?!?!? i say use the cat for a fur coat and give the rule o' the land to Dogbert!

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Postby moritheil » Tue Oct 24, 2006 1:59 pm

Branthur wrote:Just a quick update on what's goin on. :)

The bank informed us that if after the sale nobody bought it, we would still pay rent to our previous landlord until the 6 months expired. Didn't hear what would happen if someone else bought it, but that's a moot point fortunately.

We found someplace else to rent...directly across the street from our current place, actually. Opens December 1st, so we pay our rent as per normal for November, and then we're out. Gave notice today, so the huge mess that could have been is no longer an issue.


Awesome. Glad to hear that this was resolved without recourse to drama or big legal guns. :D
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Postby sok » Wed Oct 25, 2006 3:44 am

Branthur wrote:Just a quick update on what's goin on. :)

We found someplace else to rent...directly across the street from our current place, actually. Opens December 1st, so we pay our rent as per normal for November, and then we're out. Gave notice today, so the huge mess that could have been is no longer an issue.


But you will still be in MN, how is that solving your problem?
Branthur
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Postby Branthur » Wed Oct 25, 2006 6:24 am

sok wrote:
Branthur wrote:Just a quick update on what's goin on. :)

We found someplace else to rent...directly across the street from our current place, actually. Opens December 1st, so we pay our rent as per normal for November, and then we're out. Gave notice today, so the huge mess that could have been is no longer an issue.


But you will still be in MN, how is that solving your problem?


Yes, because California would be so much better...oh wait. Earthquakes, mudslides, forest fires, and the heat in general. How many more ways does God need to say "DON'T LIVE HERE" for you to get the point? ;)

I'll stay in MN, thanks.

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