Is Your Landlord In Foreclosure?

Date:September 7, 2009 | Author:Justin McHood | Category:Costs and Fees

It is not just people who own a home that are becoming victims to the foreclosure problem, people who are currently renting a property are beginning to see foreclosure impact their lives as well.

Is your landlord in foreclosure?

Are you sure?

According to the National Low-Income Housing Coalition, one in five homes in foreclosure nationwide is occupied by a tenant.

One of the common stories about landlords in foreclosure that is happening all across the US is where the landlord allows a property to go into foreclosure and then the tenants are “surprised” when they find out they have to move.

Thanks for a federal law that was passed on May 20th, in some states, the lender will be forced to honor a lease agreement of a tenant, but not in all cases. For example, if a lender forecloses on a property and then sells the home to someone who will occupy the property as their primary residence, the tenant in place then has 90 days to vacate the property.

But no matter what, if your landlord goes into foreclosure, you will incur extra moving expenses that you are not likely to get back from your landlord.

Foreclosures can create expenses for tenants, such as moving costs. If the foreclosure forces you to move before your lease expires, you can demand that the landlord pay your moving expenses. If the landlord refuses, you can sue in small-claims court, said Janet Portman, managing editor of legal self-help publisher Nolo Press and author of several books on landlord-tenant law.

Finding out if your landlord is in foreclosure is easy to do – once. But going back and keeping an eye on your landlord by seeing if a foreclosure notice has been filed can be time consuming. At least one new startup has a solution to this problem – LemonLandlord.com — where you can monitor whether or not your landlord has had foreclosure proceedings start.

More About Landlords in Foreclosure:

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Responses (0)

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jenn 5:29 PM - Sep 7,2009

What a joke, lemonlandlord.com, nice job trying to take advantage of people. why do you charge people for free info? you guys should be ashamed of yourselves. and how nice for Justin to be pitching this site, how many of those defaulting loans did you write cupcake??
Justin 6:35 PM - Sep 7,2009

Ha!

Thanks for the kind words, sounds like you are a big fan.

Great point on them charging for free information, when I met the CEO I asked him that same question “can’t people get that information for free?” and his reply made sense (to me at least):

“Yes, they can get it for free, but there is no “watchdog service” that monitors it for you. So if you thought your landlord might be going into foreclosure, the only way to know would be to go check yourself every day.”

And I think they charge like 4 bucks a month for it or something.

I know, I know, it is expensive…

I try to keep it useful/relevant for people, and somehow I must have missed the mark here. Do you have any requests for something for me to write about?

Just let me know and I will do my best.

Justin
Brian Brady 7:26 PM - Sep 7,2009

“how nice for Justin to be pitching this site, how many of those defaulting loans did you write cupcake?”

Nice. When will Zillow start holding the trolls accountable to the same policy it imposes upon its authors?

“I try to keep it useful/relevant for people, and somehow I must have missed the mark here. Do you have any requests for something for me to write about?”

I do; more of the same stuff you have been writing. The problem you highlighted is real and aggregating public records, for specific property data, has value.
jenn 7:53 PM - Sep 7,2009

It’s your venue and you can pitch whatever you want, and that’s what this is, a blatant pitch for a website that preys on the unfortunate circumstance of renters caught in a landlord foreclosure.
The readers here should know that there is absolutely no reason to pay for this information and your pitch of such a site should leave you suspect.
Valid, accurate information regarding notice of trustee sales can be found via your county recorders website/office. If one feels the need to have their information “aggregated”, there are already sites that do that for free.
jenn 7:56 PM - Sep 7,2009

predatory lending, predatory pitching…. hmm a pattern forms!
Bob 8:14 PM - Sep 7,2009

I have some clients who have been waiting to buy but are now deciding it may be time because of this very issue. They are afraid that they may be asked to leave before they are ready so instead of waiting they are now considering just buying now. The rates are good, plenty of good programs out there, and the first time home buying credit may expire at the end of November.
Justin 9:14 AM - Sep 8,2009

@Brian,
Hat tip. Thanks.

@jenn,
Thanks for replying. I would not consider myself an expert in this area, so maybe you can help us.

Is there a service that you know of that monitors whether or not your landlord is in foreclosure where someone can sign up for Free? If there is, please let us know, I am just not aware of it.

I don’t know if this helps your opinion or not but I *was* compensated highly for this post by the CEO of lemonlandlord.com — he bought me a cup of coffee at Starbucks!

He pitched me over a coffee and since I have heard about this problem from different people here in Arizona, I thought to myself “hey, that might be a good idea and actually work!”

And based on the level of feedback on this post (check the tweets) it appears that it is at least a pain point for some people.

But heck, what do I know.

@Bob,
Thanks for stopping by and sharing – I hadn’t thought of that as a “reason to buy” but I can now add it to my list!

Justin
Kevin Simpson 12:56 PM - Sep 9,2009

So landlords are the bad guys of the story? Poor lenders. The situation is harder for them that sometimes are the bad guys and on the other hand can become a simply victim!
Elise Otero 7:23 PM - Sep 9,2009

I am the Broker for a large property management firm. THANK YOU Lemon Landlord for finally offering a well deserved service to tenants! It is obvious that many of the people posting their comments have not had a renter come to them crying and screaming when their home was posted with a foreclosure notice. They had paid their deposits, signed a lease, and taken care of the property…..for what? The owner takes their rent, informs no one, does not make his payments, and leaves everyone else to clean up the mess while he has pocketed the money. I challenge anyone to try and find the information about their property at the Court House on their own! Good Luck!!!
Tim Williams 8:50 PM - Sep 9,2009

I have to agree with jenn on this one, seemed like a good article until we got to the charging tenants for free information. I have used http://www.rentalforeclosure.com for my prospective renters, they offer the information to renters for free.
Elena Hampton 9:27 PM - Sep 9,2009

I love Rentalforeclosure.com, those guys have saved my but a couple of times!! never used the one you mentioned Justin, but I don’t think I would recommend them if they are charging renters. good article though.
Ally 9:33 PM - Sep 9,2009

Great article Justin!
Arthur L. Frankson 9:42 PM - Sep 9,2009

This seems to be a good example of why to be careful with throwing endorsements around. Being in any industry relating to the real estate industry is tough right now and doubly so for lenders. To put your name on the line for a company that is obviously trying to exploit people in their time of need seems to be, well, not a very good decision to put it lightly. better luck next time.
jenn 6:45 AM - Sep 10,2009

“level of feedback on this post (check the tweets)” HA, looks like your tweetjuice fizzled, guess you should have created more accounts. i think you can take the comments posted here as a pretty good indication of the quality of the product you’re pitching.

“I thought to myself “hey, that might be a good idea and actually work!”” {translation} self, i’ve written a bunch of toxic loans and no longer have a customer base, how can i make money? shazam! i’ve got it, self, renters! we haven’t scammed any money out of them yet! self, lets charge renters money to let them know if their landlord’s loan (that i probably wrote) is going south. Then, oh this just keeps getting better, after they pay to find out they may have to move i can try and give them a crapy loan too!!!

“Is there a service that you know of that monitors whether or not your landlord is in foreclosure where someone can sign up for Free?” google is your friend.

did i miss anything thing there cupcake?
Marc 12:28 PM - Sep 10,2009

I just tested rentalforeclosure.com by entering the addresses of several properties I personally know are in foreclosure. It did not work for any of the properties I tested. I do not know how to find foreclosure information using Google (Jenn must be a computer wizard), but I do know how to go to the county website and find it. Of course the problem is that I dont have the time or inclination to do it more than once or twice (and then only if I suspect something is up). I guess that is where a service like lemon landlord comes in.
Justin 12:44 PM - Sep 10,2009

@Kevin,

I have learned that in each situation, the “bad guy” could be a renter, landlord, lender or a combination of all three. Same goes with a “victim”! I like your site too… thanks for commenting.

@Elise,

Thanks for commenting – one thing is clear to me after writing this article, this is a problem out there and many people appear to be interested in it.

@Tim,

Thanks for sharing the other site with us – I would have easily put this in the post as well had I known about it. Honestly, I could care less what the business model of what a site is that does this type of thing, in my opinion, the important piece is that consumers are aware that they have an option. I will be sure to include the other site if I write more about this in the future. Thanks again for sharing!

@Elena,

Thanks for commenting – I will leave it to the site owners to argue about business models, I am neutral. It is clear that they both spent money building their sites so how the capture that investment back is up to them. Ads, subscription model, indirect referrals, list building, etc. Glad to hear that the concept works though, that is the important thing here I think.

@Ally,

Thanks!

@Arthur,

Thanks for stopping by and commenting. In no way other than 2 cups of coffee with a CEO am I affiliated with any of the sites mentioned. I am happy to stand by endorsing the idea of keeping an eye on whether or not your landlord is in foreclosure though. Thanks to our readers, now we have another site that we know about (www.rentalforeclosure.com).

@jenn,

Thanks. Now that I know about http://www.rentalforeclosure.com and am pitching it as another option (now I am aware of 2), folks can choose. It is clear that this is a hot topic out there though – people are generally interested in the service I think.

And thanks for the cupcake reference again, it gives me a chuckle each time.

Justin
Tennille 2:51 PM - Sep 10,2009

Justin…..YOU’RE FAMOUS!!!!!!!!!!
Free Loan Modification Kit 12:16 PM - Sep 12,2009

I have been hearing many stories of people getting kicked out on the street because there landlords where in foreclosure and they had no idea. The saddest part is the people where current on thier rent payments and basically are just getting screwed…
James 5:40 PM - Sep 12,2009

Justin,
Great information, we just moved do to this situation. We made the choice to move after the duplex was posted with a notice of default and contacting my attorney who informed me about the new law. I would stongly recommend that you and all your readers check out my website, http://www.greatworkplan.com/jroberts, to find out how they can get affordable access to the legal system. Knowing your rights and having affordable legal assistance will make this and any other situation easier to deal with.
Free Loan Modification Kit 4:55 PM - Oct 1,2009

I have been hearing stories about people who have been paying their rent on time only to be evicted because their landlord was in foreclosure and never informed them…just so sad
Bill 8:33 AM - Oct 2,2009

I have tried several of these companies that search properties and have found that the data they provide is very inaccurate. I have a company that works short sales and I know the houses I am searching are in foreclosure when these people say they are not… realty trac offer this service and is wrong about 80% of the time when I get data back. http://www.rentalforeclosure.com is about the same.
I did find one company http://www.LandlordInvestigators.com that is not automated they actually have a live person review the file much like a title search. They have been accurate 100% of the time due to this approach. I know a lot of states you can go on public records, but the problem that we see is the owner of the rental property may have other properties out of your state… then what… If they are going into foreclosure on an out of state property guess which one is next! I know Landlord Investigators searches the owner in multiple states and offers the monthly monitoring as well… It does really pose a problem for tenants right now, even though the landlord didn’t create the problem they do add to it when they are not up front with the renters that occupy the properties.
Foreclosure-Auction 10:43 AM - Jun 16,2010

Nice. When will Zillow start holding the trolls accountable to the same policy it imposes upon its authors?
Michael 2:14 PM - Nov 30,2010

Very interesting. It’s crazy how people can be paying their bills on time and still get evicted.