Foreclosure of a rental

[APToddlerMama]

Does anyone have experience with having their rental property foreclosed on? Can they take your primary home? Garnish your wages? When do you stop paying for heat/water/property taxes? How long does it take? TIA

[itsrtimedownhere]

i'm not sure about being the homeowner but we just got kicked out of the place we were renting because the home was foreclosed on. so from a renter's point of view, this is what happened to us.

we started renting (through a real estate agency) in may '09. in august, we got a letter sent to the house from the bank. we didn't know what it was so we gave it to the real estate agency.

a few weeks later, we got another. my dh told the real estate agent and she said to throw it out because the homeowners already knew about it. so, naturally, we opened it and read it. they hadn't paid their mortgage since april. (the month BEFORE we moved in.)

the real estate agent told us we were going to have to move but recommended waiting until we hear from the bank because we will probably get a cash for keys bonus. so we did.

december 17 rolls around and i get a knock on the door. it's from a guy hired by the bank to come get us out. he was really nice and actually seems kind of nervous that we were going to give him a hard time. but we had known this was coming and it wasn't a big deal.

he told me that the bank was going to call us after the holidays to set up a date we needed to be out by and that it would be 30-45 days from the day that they called us.

tuesday, january 6, we get a call from the bank saying that we were sent a letter on dec 16 (the day BEFORE the guy came to our house) and that we had 6 days to move out. if we were out in time, we get $4000 for cash for keys. if we weren't and needed another month, we get $2500.

needless to say, we busted our butts for 6 days to move and get the higher amount.

also, because the homeowners no longer had anything to do with the real estate agency anymore, we got the deposit back because the agency keeps it while we live there.

(cash for keys is basically us promising not to trash the place and the bank paying us for it.)

[leavemealone]

I would look into your state laws. In some states, the bank can come after the homeowner for the balance of the loan after the sheriff sale. In other states, they can't. I don't have experience with foreclosure of a rental (only foreclosure of a primary residence), but it can take some time. It's been about a two year process for us, but ours has been stalled a few times for various reasons.