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Foreclosures

Tenant Occupied Homes

Hi, I’m Nevada Foreclosure Consultant and Loss Mitigation Specialist Damian Falcone.  This is the second video in our Nevada foreclosures series.  The first video talked about owner-occupied homes that go in to foreclosure, and this video will discuss the process of foreclosures from the perspective of a tenant in a rented home that is in foreclosure.    

This is Get Modified - your source for loan modification and foreclosure prevention information.  As always, for even more information, go to www.falconcreditmanagement.com.

In our last video we talked about the foreclosures in general.  This process presents some unique challenges to a tenant in home undergoing a foreclosure.  Because of the difficult situation tenants are often in, the Federal Government recently passed a bill called the Protecting Tenants at Foreclosure Act of 2009.  In general, the law gives a tenant at minimum of 90 days to stay on the property after one of the many recent foreclosures takes place. 

Specifically, the law states that when a home is foreclosed on that has renters occupying it, the new owner must do several things before he can evict the tenant.  First, the new homeowner must allow a bona fide tenant to remain in the home until the end of the lease period unless the new owner intends to occupy it.  Before we continue, I would like to define what a bona fide tenant is.  A tenant is bona fide if his lease agreement predates the notice of default sent to the original homeowner, if the tenancy arose from an arms-length transaction – this is where the previous owner and tenant have no family relationship, and if the current rent is close to the fair market value rent.  Assuming that these things are true and that the new owner does not want to occupy the house himself, the tenant can stay until his lease runs out.  If the new owner wants to live in the house, you are not entitled to stay till the lease expires, but he must give you at least 90 days notice that you must leave the property.  It is important to note that if during the remainder of the lease or the 90 day period the tenant fails to pay the rent, he can be evicted at any time. 

There is one more important part of the Protecting Tenants at Foreclosure Act:  the law is only valid until December 31, 2012. 

So, to summarize, a tenant has at least 90 days from the time the new owner gives them the notification to vacate, even if the remainder of the lease is for less than 90 days.  If the lease is for more than 90 days, a bona fide tenant can stay for the remainder of the lease, unless the new owner intends to live in the home. Foreclosures are something to be taken seriously.  A little work in advance can save much more in the long run.

I’m Loss Mitigation Specialist Damian Falcone and this is “Get Modified” with some foreclosure information.

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