forecloser question

[bigtim6656]

I have a question not really bk related but forecloser related.

A friend of mine and his wife live in a house that they rent. The owner has had alot fo forecloses on his rentals and told my friend he was filing chapter 7 and might get some letters to the house.

My friend did not pay rent for three months at my recommendation. I worried he would get tossed out a few weeks after paying his rent and be stuck. Well after the 1st of the third month the owner called to see why he had not paid as he had every month for 6 years and never been late. He told him he was concerned about the BK and when it was sorted out he would pay. The owner said that would not be a issue but bis bk was denied as the trustee said he made to much money with his rentals and job so my friend went up and made the payments. Unlike alot of folks he held on to the money to either pay or move.

Well a few weeks ago he got a foreclosing notice to at his house and asked me what to do. I told him to call the landlord (no return call for two weeks)

The other day I went over and we got talking about it and I looked at the notice and it had the owners plus john and jane doe. I called the lawyer for the bank and they told me the renters where john and jane joe. They told me if they had a lease and where paid up they might be able to stay longer then the foreclosing process. They had a rental agreement back when they moved it but it was a month to month lease not a year to year lease.

They told me the process would take no less then 90 days and could take 2 years.

Figure the guy fights it how long could it take to get everything done?
What if he does not fight it?
And what if he can now file Bk

I told my friend not to pay rent hold onto the money till they had to move and then use it to move. If the bank would let them stay then give the bank the back rent.

What are the chances the bank would let them stay after they foreclose on the house?

[ccsjoe]

Look up PTFA of 2009 for starters. Second, the bank, under PTFA, and in the absence of a buyer who wants to inhabit the property as primary residence must provide them either with a minimum of 90 days to vacate or the duration of their lease, whichever is longer. In addition, some banks are willing to let renters stay under a new lease with the lender so the property remains occupied and upkept. However, these are few. Most banks are not in the property management business and would rather take possession. In either case, they should back themselves by knowing their rights under PTFA and their state's civil code as it applies to the effect of foreclosures on leases, evictions, etc. With any luck, they'll be able to negotiate a cash for keys (C4K) settlement with lender to pay for their moving costs, new security deposit, etc.

Good luck.

[ccsjoe]

Now that I read closer, they don't have a lease, but rather a month-to-month tenancy, very possibly arms length transaction, therefore the 90 day vacate rule would apply.

[bigtim6656]

by 90 days vacate rule is that 90 days after the foreclosure goes through or from the date they got the notice. It does not say anything about them staying or going.

Now that I read closer, they don't have a lease, but rather a month-to-month tenancy, very possibly arms length transaction, therefore the 90 day vacate rule would apply.

[bigtim6656]

could they sign a one year lease with their landlord now and stay for the year? since he still owns it.

[ccsjoe]

90 days is from the date they are given the 90-day notice, although some states interpret it as being from the date they are first contacted by lender.

You need to look at the civil code for the lease question. In some states, there have been rulings stating that leases must predate the Notice of Default, others the lease must predate the Notice of Trustee Sale. So no straight answer to that question, other than in the civil code. Look at www.avvo.com also to ask a lawyer a free question specific to that state and situation ,I found that site very useful to me when my landlord got foreclosed on 3 months ago.