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Renter Facing Eviction Soon:

Scales of Justice

If the owner of the house you're renting is going through Foreclosure; there are several possibilities that allow you to stay in your home!

    * Note: There are also possibilities for staying in the home as a renter if you are the homeowner going
                through Foreclosure, and have been living in the home as a primary residence.

When your landlord goes through Foreclosure, it can be very unsettling not being sure of what the future holds. Try to remember it is not you who are losing the house, it is the owner who is in financial trouble. Here are a few options.

Fannie Mae now owns the home I am renting:

Fannie Mae has a Tennant-in-Place Rental Policy. You should be automatically contacted if this applies to you. You may also contact the Fannie Mae's Consumer Resource Center at 1-800-7 FANNIE (1-800-732-6643). Fannie Mae has been buying up a lot of the bad risk mortgages in an effort to help our struggling economy, and may have bought your owner's mortgage too.

Here is a quick reprint/summary which you can look up on the Fannie Mae website:

Fannie Mae Tenant-in-Place Rental Policy

To help minimize disruption, eligible renters who want to stay in a home that has been foreclosed can sign a month-to-month lease if the property is owned by Fannie Mae. The policy, which applies to properties owned by Fannie Mae, will help bring stability to communities affected by high foreclosure rates.

Eligible renters will be offered a new month-to-month lease with Fannie Mae and Fannie Mae will manage the properties through a real estate broker or a property management company. Renters may also be eligible for financial assistance if they desire to relocate.

Program criteria highlights

  • To qualify, a renter must live in the property when it is acquired by Fannie Mae.
  • Any single-family property is eligible including two- to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing.
  • The property must meet state laws and local code requirements for a rental property.
  • Fannie Mae will not require security deposits.
  • Under the Fannie Mae lease, the property may be marketed for sale and if sold the property would be transferred to the new owner subject to the lease.
  • Rental rates under the new leases will be comparable to other rents in the same market and subject to any legal rent control restrictions.

Protecting Tenants at Foreclosure Act of 2009 (PTFA)

In addition, pursuant to the Protecting Tenants at Foreclosure Act of 2009 ("PTFA"), bona fide tenants after foreclosure sale may be entitled to remain in the premises under their existing lease or tenancy. If you are a renter in a Fannie Mae owned property and the property has been foreclosed upon, you should have received the Fannie Mae Knowing Your Options document that sets forth information regarding some of your options.

Please contact the property manager or broker listed in the document to provide information about your lease or tenancy. Bona fide tenants may also choose to sign month-to-month leases with Fannie Mae pursuant to the rental policy. Contact the property listing broker or the Fannie Mae Resource Center at 1-800-732-6643 for more information.

If you have questions concerning your rights as a tenant under PTFA or other state or federal laws, please seek the advice of an attorney. Information on legal services in your area is available here: Find a Local Pre-Screened Attorney.
You may also find your answers in the Fannie Mae Tenant-in-Place Rental Policy FAQs
or the Fannie Mae's National REO Rental Policy FAQs.

* Notice: Fannie Mae has recently announced it has renamed the deed-in-lieu of foreclosure process as a 'mortgage release' and is using that term throughout the new servicing guidebook.

The government-sponsored enterprise said servicers are required to implement the policies for all loans under consideration for mortgage release on or after March 1, 2013.

The home I am renting is not owned by Fannie Mae:

Under most circumstances, your lease will be honored with the new owner too. If the new owner is an investor, like your current owner, they will likely be thrilled that they already have a resident with a verifiable rental history in place to help them pay their mortgage. Your lease is a binding contract that transfers to the new owner along with the property. So even if you are getting nasty letters from the bank (who may be in the act of repossessing and doesn't think of themselves as a landlord), or anyone else with financial interest in the house, your contract says that they must first give you legal notice, in most cases of at least 30 days. Different states have slight variations on this theme, but for the most part, the law is on your side. If the new owner wants to move in, you will usually have 90 days to find a new home - they can't just put you out on the street.

I Still May Need An Attorney

The general rule of thumb is that if it doesn't seem fair to you, someone has probably already gone through the very same thing; so there may be either a law or a precedent already established in your favor.

Has something happened that makes you feel you Need a Real Estate Lawyer?

For more options please refer to our Renter's Options Page.

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