Renters in Bank Foreclosure Homes Increasing
Renters are the latest casualty in the ever-growing foreclosure crisis in California. More and more tenants are scrambling to find cheap places to stay after they discovered that the properties they are renting are bank foreclosure listings.
Most landlords who are facing the prospect of foreclosure often neglect to inform their tenants about the situation. And tenants being evicted from their rental homes are becoming a common sight in California.
Some renters, as soon as they saw a foreclosure sale notice posted on their rental homes, would start looking for alternative place to live rather than wait for banks or new owners to evict them. But all of them agree in saying that they are innocent victims of the foreclosure crisis.
In Sonoma County, 4 out of 10 bank foreclosure homes are rentals, according to online real estate monitoring company RealtyTrac. Data showed that renters occupy almost 40 percent of the total foreclosure properties in the country.
The problem about the growing number of renters being evicted in a short notice has prompted California lawmakers to extend deadlines of eviction.
Also, government-controlled mortgage lenders Federal Home Loan Mortgage Corp. and Federal National Mortgage Association have launched programs that allowed renters to remain in bank foreclosure homes until such time that they can be sold. Both government agencies own about two-thirds of the total home loans nationwide.
Renters who are usually taken by surprise by the turn of events often find themselves bewildered and froth with uncertainty over how long they can remain in their rented foreclosed homes, where or whom to pay the rent and who to call when the house needs repair.
Under California’s revised law aimed at protecting tenants in repossessed homes, lenders or banks are required to give tenants a 60-day notice, up from the previous 30 days, to vacate the property.
However, because lenders do not want to act as landlords and prefer to dispose the properties immediately to reduce the load on their portfolio, would offer money to tenants to vacate the homes as soon as possible.
If tenants agree to take the cash from lenders or banks, they waive their legal rights and allow agents hired by lenders to show the rented bank foreclosure homes to potential buyers.
