Many times when people think of homes that are foreclosed on, they think of people who live in a home, for whatever reason couldn't continue making the payment and as a result are forced to move out.
But across America, there is another scene playing out as well -- investors are letting homes go into foreclosure and as a result, the tenants living in the homes are faced with tough decisions about their future.
Thanks to a new federal law that was passed on May 20th of this year, if a bank forecloses on an investment property, the bank is generally required to honor the terms of the lease... but there are exceptions. One exception is if the lender then turns around and sells the property to someone who intends to occupy it as their primary residence. If this happens, the bank is required to provide a 90 day notice to the tenants to move out.
One of the worst things about a landlord who has made the decision to let a property go to foreclosure is that often times the landlord does not tell the tenant and the tenant is surprised when they find out. While it is true that foreclosure proceedings are public record, most tenants don't have the time to check public records every day just to make sure that their landlord is not in foreclosure. The only service that I am aware of that checks whether a landlord is in foreclosure and notifies you if your landlord is in foreclosure is LemonLandlord.com.
And if you are currently renting and you think there is even the slightest chance that your landlord might go into foreclosure, it might be a good idea to keep an eye on it... just in case.