Please Help!

[technoreid1]

We are not yet in foreclosure.... 5-6 months of not paying mortgage.... And the mortgage company has not yet filed an "official" notice of default yet! We have rented a home already and are in the process of moving to that home.... But we have yet to be formally foreclosed on.....(which will take 4 months in California) basically this house will be empty for a minimum of 4 more months in our name....
We have not yet filed our BK13 either yet....

We came up with an idea to try and make some $ while our house is empty...
Can we legally rent our home out to business travelers in the meantime? Say for 3 days at a time?

Are there any legal ramifications if we rent it out like this?

thanks, techno

[rrockinggramma]

any rents you collect would be counted as income in your look back period.

[Thuglife]

it's your house

Technoreid1

In a nutshell; Even though you are not paying for it the house is still yours (legaly) until your name is removed from the deed. As far as renting goes; yea I quess you could do that but it would be pretty scummy of you if your tenants had to answer the door to the sheriff one morning. Practice this at your own risk.

[technoreid1]

I would tell them it's in foreclosure. I guess my question is: would this be illegal in any way, shape, or form?

I am trying to come up with ideas on how to make some money with the property while I still have it. That's all....

Sure tons of people have thought of this....

thanks, techno

Technoreid1

In a nutshell; Even though you are not paying for it the house is still yours (legaly) until your name is removed from the deed. As far as renting goes; yea I quess you could do that but it would be pretty scummy of you if your tenants had to answer the door to the sheriff one morning. Practice this at your own risk.

[Thuglife]

Here's what I happen to me...

Technically it's not illegal to rent the home while the deed is still in your name.

It usually takes around 10 days after the Foreclosure sale for the new owner to clear your name from the deed. Then your tenent will recieved notice via certified mail from the new owners rep (sometimes a realtor representing the bank) that says that the previous owner no longer owns the home and to vacate in 3 weeks. The renters then become "tenants in sufference" and could actually squat on the house for months. This once happened to me in a property I rented back in the ninetees. I stayed rent free for 3 months and my landlord collected at least 3-4 months of rent from me before I got wise.

Now Ironically, I'm facing my own foreclosure (in Northern VA) on a 5000 sq. ft home. Since the EX left me with all the bills and obligations, I've been renting out rooms for a year stressing myself to death from month to month with no lates. Then 2 months ago I decided to stop the madness and sleepless nights of worry and just said "to hell with it". I'm no longer going to throw good money after bad and when deciding to cut your losses it's better to do it sooner than later. So I started pocketing the rent to get ready for the unknown that most of us are facing. Wherever I'm going I'm sure money will come in handy.

So here's what I'm doing. I'm going to continue renting out the rooms on a month to month basis until I recieve notice of the sheriffs sale. Once I get that, I'll give everyone their 30 days notice. Since I already have a realtor sign in front of the home I'll tell them that I got lucky and sold the home (yea, right) so it shouldn't come as a total shock. And there's no reason they need to know that the buyer was the bank.

I'll keep everyone posted on how this goes!

[technoreid1]

Completely understand.
We have not made a mortgage payment in 6 months (going on 6 months as of DEC 1st). We are now moving (we found a nice rental home)....We were stressing out after about 5 months of no mortgage thinking we will be kicked out eventually.... So we secured a place to live.... (we also have many pets so we did not want to wait until the last minute + we will be filing a BK) WE HAVE NOT YET RECEIVED A NOTICE OF DEFAULT YET! (in CA it takes 4 months from the time the NOD is recorded and recieved until the time we would have to be out.) SO we have a minimum of 4 more months... (could have saved a lot in those 4 months but the stress of NOT finding a place with our pets and our BAD credit was mentally tough. I guess in a way I am regreting moving out early and NOT being able to save what I wanted to save. And who knows....that 4 months is a MINIMUM...... IT could take them 6 more months since they have not done anything yet!


thanks, techno





Going from owner to renter is strange!

Technically it's not illegal to rent the home while the deed is still in your name.

It usually takes around 10 days after the Foreclosure sale for the new owner to clear your name from the deed. Then your tenent will recieved notice via certified mail from the new owners rep (sometimes a realtor representing the bank) that says that the previous owner no longer owns the home and to vacate in 3 weeks. The renters then become "tenants in sufference" and could actually squat on the house for months. This once happened to me in a property I rented back in the ninetees. I stayed rent free for 3 months and my landlord collected at least 3-4 months of rent from me before I got wise.

Now Ironically, I'm facing my own foreclosure (in Northern VA) on a 5000 sq. ft home. Since the EX left me with all the bills and obligations, I've been renting out rooms for a year stressing myself to death from month to month with no lates. Then 2 months ago I decided to stop the madness and sleepless nights of worry and just said "to hell with it". I'm no longer going to throw good money after bad and when deciding to cut your losses it's better to do it sooner than later. So I started pocketing the rent to get ready for the unknown that most of us are facing. Wherever I'm going I'm sure money will come in handy.

So here's what I'm doing. I'm going to continue renting out the rooms on a month to month basis until I recieve notice of the sheriffs sale. Once I get that, I'll give everyone their 30 days notice. Since I already have a realtor sign in front of the home I'll tell them that I got lucky and sold the home (yea, right) so it shouldn't come as a total shock. And there's no reason they need to know that the buyer was the bank.

I'll keep everyone posted on how this goes!

[demismom]

It's not illegal in Michigan. We did it AND when I tried to give the mortgage company the money - they wouldn't take it. The attorney said they wouldn't and he was right.

[HHM]

If you do rent the home, you need to do so on a "month to month" basis only. If you have tenants sign an extended lease, you could be subject to fraud and damages action when the house forecloses. Also, DO NOT comingle any deposit you take from the tenants with other money. Open a seperate bank account to hold that money and DO NOT TOUCH IT, the money is not yours legally.

[technoreid1]

Good advice.... But what about telling them the house is in foreclosure.... I feel I would have to... to be honest....
It would only be right.....

Also who is going to rent a house out that is in foreclosure?
(it's not yet in foreclosure but it will be soon I think)

Do you think I could get a short term tenant say like 3 months
and just tell them it's in foreclosure and they have to move in 3 months?

I dont feel right about any of this and will probably no do it becasue it feels "sketchy" to me to rent out my home that is going into foreclosure....


Thanks, techno

If you do rent the home, you need to do so on a "month to month" basis only. If you have tenants sign an extended lease, you could be subject to fraud and damages action when the house forecloses. Also, DO NOT comingle any deposit you take from the tenants with other money. Open a seperate bank account to hold that money and DO NOT TOUCH IT, the money is not yours legally.

[technoreid1]

So you rented your home out while it was in foreclosure?
How long did you rent it for? And did you tell the tenants what was going on?

Thanks, techno

It's not illegal in Michigan. We did it AND when I tried to give the mortgage company the money - they wouldn't take it. The attorney said they wouldn't and he was right.

[HHM]

But even still, things get messy when you rent a house that is "going" to foreclose.

1. What if the tenant stays past their lease and the home forecloses. (I am not sure you can say...it's the banks problem now). If the tenants damage the house, that bill goes to you.
2. Worse, yet, what if they stay past their lease, continue to pay rent after foreclosure...technically, you don't own the house, that money is not yours.

Actually, as a tenant, I wouldn't mind renting a house that is in foreclosure, because once foreclosure happens, the tenant can stop paying rent, and the odds of a quick eviction are nil. In this market, the tenant could easily stay in the house upwards of 6+ months or longer, rent free, before the bank figures out they should evict him, or that the house is bought by a real buyer.

[chpxiii]

Do you think I could get a short term tenant say like 3 months
and just tell them it's in foreclosure and they have to move in 3 months?

Tell prospective renters the truth. I once rented a condo for 6 months because the owner was planning on selling it. So I signed a lease for 6 months knowing it won't renew.

At the time, I myself was in a transition phase of my life and so I needed some place quick that would give me time to get my ducks in a row.

Just be honest with your renters so they know what they're getting in to.

[demismom]

We had already had tenants in the house so the situation was a little different. We did tell them that the house was in foreclosure and that's when they decided to stop paying rent. We tried to evict them and they did catch up and when we tried to give the mortgage company they said that they legally couldn't take it because we had filed bankruptcy.

I think it has something to do with the fact that they hadn't filed to lift the stay or something, i don't know. They couldn't legally try to collect on a debt. It did, however, have to be included in our income.