A foreclosure or eviction might be frightening. Discover your rights and what you can do here.
What you will discover:
Can I be evicted after a foreclosure?
What exactly is a redemption period?
When may I be evicted from my own home?
When may I be evicted from my rented home?
What if I rent and my landlord is late on their mortgage payments?
After a foreclosure, how do I pay my rent or mortgage?
How would a foreclosure or eviction affect my credit?
How does a landlord’s foreclosure or bankruptcy affect my lease agreement?
Both renters and homeowners may lose their houses due to economic hardship or situations beyond our control. Landlords have the right to evict tenants if they do not meet the conditions and requirements stipulated in their Lease Agreement, or if the lease expires. Homeowners with mortgages may lose their houses via a distinct procedure that starts with foreclosure. In this section, we will go over some of the most typical concerns that homeowners and tenants have while facing foreclosure or eviction.
Table of Contents
Can I be evicted after a foreclosure?
The quick answer is yes, but the fact is that it is much more difficult than you may expect. Foreclosures normally take far longer than evictions, although they may also compel people to leave the property.
Foreclosures take longer because the legal procedure necessary for a bank or other lending institution to remove the property that backed the mortgage must be followed. The most typical cause for property foreclosure is that the homeowner has ceased making mortgage payments.
In most areas, foreclosure is a court-ordered procedure in which the court determines that the bank or other lending institution has the legal authority to foreclose and seize your house. That procedure may take a long time.
Non-judicial foreclosure, which does not involve the court, is also permitted in several jurisdictions. It is a significantly speedier procedure that homeowners are often required to agree to as part of the loan application process.
What exactly is a redemption period?
After a foreclosure is completed, several jurisdictions provide homeowners the opportunity to a redemption period. A redemption period is a time period during a foreclosure in which you, the homeowner, may retain your property by repaying your debt.
During the redemption time, you may continue to reside in the home or it may be occupied. In most circumstances, if you can get the means to pay off your mortgage within the redemption period, you can avoid foreclosure and retain your home.
Foreclosure rules differ from state to state, and not all states offer redemption periods. The redemption period might be rather lengthy. It might take a year or more in certain areas. Some jurisdictions also allow you to forgo your entitlement to a redemption term, which is something that many banks would ask you to do as part of the loan application process.
Homeowners are protected by the redemption period. However, if you do not have a redemption period or if it ends and you are unable to pay off the mortgage, you may be evicted from your house.
When may I be evicted from my own home?
Only when you have no legal right to remain in a residence can you be evicted. As a homeowner, this only occurs if you have been foreclosed on and have no redemption time, or if your redemption period has expired and you have been unable to pay off the whole mortgage. The bank or lending institution may remove you from your house only once the foreclosure has been completed and the redemption time has expired.
When may I be evicted from my rented home?
The eviction procedure is substantially speedier as a tenant. An eviction may occur in as little as a few weeks. If you breach the conditions of your lease or if your lease expires and does not renew automatically, you may be evicted. Renters do not have the same rights as homeowners, but there are certain safeguards in place throughout the eviction process.
What if I rent and my landlord is late on their mortgage payments?
If you are a tenant and your landlord falls behind on payments, the bank or another lender may seize their property. The foreclosure of your landlord may influence your ability to continue living in your apartment or rental property. since a renter, you should consult with a lawyer about your rights in this case, since they differ by state.
After a foreclosure, how do I pay my rent or mortgage?
Making mortgage payments after a foreclosure
Even if your lender goes through the foreclosure process, you may still be required to make your mortgage payment as a homeowner. There are basically two possible explanations for this:
You wish to keep your house and renegotiate your mortgage payments or pay off your previous lender.
Because you were underwater on your mortgage, you owe a deficiency judgment.
Underwater implies you owe more money on your house than it is worth. If you sell your home to a third party and the proceeds do not pay the whole amount of your mortgage, you may still owe the bank money for a property that you no longer own. These are known as deficiency payments.
Renting a house following a foreclosure
If you are a tenant and your landlord is in foreclosure, you may still be required to meet your rental obligations. In certain situations, you may be notified of a new landlord who will take over for your previous landlord. In certain cases, you will simply continue to make the same payments, but they will most likely be sent to a different individual or business.
In certain situations, you may be requested to vacate your home or apartment after a foreclosure. They must still provide you with enough notice and time to depart. The Protecting renters at Foreclosure Act (PTFA) specifies that renters must be given at least 90 days to vacate a foreclosed home. If your rental duration exceeds 90 days, you may be eligible to remain for the whole length of your lease. Keep in mind that you have alternatives for asserting your rights if you feel the eviction is unlawful.
Of course, if you leave the leased house, you will no longer be obligated to pay rent.
How would a foreclosure or eviction affect my credit?
A foreclosure or eviction will have a negative influence on your credit.
A foreclosure may be more damaging to your credit than an eviction. While it may take a month or more for a foreclosure to reflect on your credit record, bear in mind that foreclosure is often the consequence of missing mortgage payments. Each missed mortgage payment, as well as other missed payments, will most certainly have a negative impact on your credit. Your credit score will most certainly have plummeted drastically by the time the foreclosure happens.
Rent arrears or evictions may not have a direct effect on your credit unless:
You are evicted and ordered to pay money by a court.
A collection agency purchases your debt.
Missed payments are reported to a credit reporting agency by your landlord.
You should also bear in mind that a rental history record, which is not the same as your credit report, will indicate any previous evictions. That means that no matter how strong your credit is, a new landlord may refuse to rent to you if they notice an eviction on your rental history record.
How does a landlord’s foreclosure or bankruptcy affect my lease agreement?
The Protecting renters at Foreclosure Act (PTFA) protects renters who reside in repossessed homes. You should have at least 90 days to leave your property, but if you still have more than 90 days left on your lease, you may have up to the whole length of your lease. In many circumstances, your lease prevents you from being forced to leave immediately.
If your landlord declares bankruptcy, they may be attempting to avoid foreclosure on the property where you reside. In such case, you may need to modify where you make your payments, but your lease should still be valid. Finally, although talking with your landlord is critical in this situation, you may want to corroborate what they tell you with your own lawyer.
You may need to engage into a Lease Amendment with the property’s new owner, whether a bank or a third party. In many circumstances, you may simply change the lease to say who now owns the property and where rent payments should be paid without affecting any other lease provisions.
