Uhm.
So we just had a man come to the door and post foreclosure notices on our house. The one that we rent. We pay our rent every month, but the notice says that the mortgage payments are twice what we pay in rent each month. My first thought (after the initial shock) was that we could buy it for cheap if it was foreclosed. Then we saw the mortgage balance. Uhm. Maybe if we could buy it for half that. Judging from the interest rate and the discrepancy in payments, this was definitely a spec home that was intended for flipping. The owner hasn’t made payments in five months.
That was weird. Just weird. I actually thought of this a couple of weeks ago, wondering if our rented house would be foreclosed upon. I don’t know why I wondered. Just had a weird feeling. Of course, Frank was at the door, as I couldn’t be pulled away from my burnt BBQ chicken and non-burnt roasted potatoes. Rowdi was going nuts, barking like mad, and my dinner was interrupted, so I just yelled, “Get him, Rowdi!” and continued to snarfle. I could only hear bits and pieces, but as soon as I realized what was going on, I jumped up and ran to the door. I think the guy was relieved, because we weren’t as upset as we would have been if we were the owners. I asked how soon we need to move out, and he assured me that it would take a long time. Either way, I am most likely going to have to clean and/or pack. Crap.
It’s a nice house. Lots of upgrades. I’d like a bigger kitchen, bigger yard, a garage that could actually fit two cars, and another bedroom, but if we could get this baby for cheap and not have to move, I could live here for several years. I’m pretty sure they wouldn’t accept our offer, though. So I see a move in our future. Argh. Not that big a thing for us, but still.
Oh well. I guess we call the property management company tomorrow.
Oh, no! NO! What?? That sucks! No. Okay. I need to email you something about this.
January 14th, 2009 at 9:43 pmoh no
January 15th, 2009 at 6:11 amhappy thoughts coming your way
that stinks out loud!
January 15th, 2009 at 6:36 amhere’s hoping the move won’t have to be real soon, say like spring or summer-when you don’t have to worry about snow.
That was one of the questions I asked of my property management company before I rented. Scary / frustrating stuff.
January 15th, 2009 at 7:10 amOn the bright side, I’ll wager you aren’t fully unpacked.
January 15th, 2009 at 7:35 amMake the offer. You might be surprised what they will take to get a bad loan off their books, especially in today’s economy.
January 15th, 2009 at 7:38 amThanks y’all.
_Jon, we moved in here 12/2007, and when we renewed our lease in August, he was still making payments. Apparently he stopped right after we renewed. Sigh.
spacemonkey, it’s funny, because in November that would have been true. But I went on a book-unpacking rampage, and now I only have about 10 boxes that aren’t unpacked. Out of 150-ish.
Mack, I’m pretty sure we will. If they’ll take the number I’m thinking in my head and if we can get a loan for 5% down, then who knows? Maybe we can get the house. I do like all these upgrades…
January 15th, 2009 at 8:05 ami say make the offer too! no institution wants a foreclosure on its books at this point in time. i love that house! the kitchen is you!
January 15th, 2009 at 8:50 amThat sucks! Keep us posted on what’s going on.
January 15th, 2009 at 11:33 amIf you like the house and the location, offer the mortgage company to take it off of their hands for what you are paying in rent. You win, they don’t lose as much.
January 15th, 2009 at 12:42 pmOh, and if you want to be mean, you could stop paying rent. It would take longer to evict you than the foreclosure would take. Of course, I expect that both of you are better than that. but you have to admit that the comeuppance is tempting.
January 15th, 2009 at 12:45 pmDarn. We rent as well but I’m pretty sure our rent covers the mortgage so I haven’t really thought about it but maybe I should!
January 15th, 2009 at 1:06 pmWow - I do so hope that it all works out the way you want it to!!
January 15th, 2009 at 1:38 pmWhat? I hope you don’t have to move, either.
January 15th, 2009 at 6:20 pmThis is happening more and more often. A friend of mine went through it about 6 years ago in Colorado, long before this whole real estate mess. It was unheard of at the time. She did work to see if she could make her rental payments directly to the mortgage-holder and be able to stay. It didn’t work in her case, but might be worth a try. If you can’t buy it, maybe they’d rent it to you for a while as they figure things out. It would be MUCH better for the bank (or whoever holds the loan) than to have it sitting empty.
January 15th, 2009 at 8:58 pmYikes.
January 15th, 2009 at 9:14 pmOne of the financial programs I listen to on the radio Saturday mornings was saying that you aren’t obligated to make rent payments on a property that’s in forclosure… but I’d check to see if that’s true in your state.
January 15th, 2009 at 10:29 pmThat happened to a lady I work with who is raising her grandson. She was basically kicked to the curb and had to move out in two days.
I had a scare when my landlords didn’t come by for a couple days when the rent was due a while back. Lucky for me, they were out of town. I did check my address to see if it was on the foreclosure list (it isn’t).
Arizona is trying to help renters in the future. Hopefully they won’t forget when they’re trying to fix a major budget deficit.
If they try and kick you to the curb, I like the idea of sicking Rowdi on them. I only have a grouchy old cat for home defense.
January 16th, 2009 at 7:24 pmSarah-
If you stop paying rent, place that money in a bank account for quick access, and talk to a lawyer. The amount of time it takes to evict a tenant varies wildly from state to state. Here in Texas, I can get a nonpaying tenant out of a rental property within 45-60 days MAXIMUM, if the rental contract is appropriately written. I can get them out in a shorter time in many cases, and have done so (yes, I am one of those EEEVIL lawyer types).
Steve
January 17th, 2009 at 2:02 pmI had a neighbor who rented a house across from us and lived with his girlfriend. They broke up and he moved out and stopped paying the rent but the girlfriend, who wasn’t paying, refused to leave. One day when she was out the landlady just came and changed the locks. You did not wan’t to be there when the princess returned to her castle.
But anyway - so what state will you move to now? You’ve done Texas, Florida and Idaho. 47 more to go.
January 18th, 2009 at 2:06 pmI am also a Texan, and I buy foreclosed houses, and I have EVICTED non-paying rental tenants of a foreclosed home. Steve is correct that it takes about 2 months in Texas to evict someone, 90 days if they get a good lawyer who uses all the delaying tactics possible.
You will not be able to find anyone at the mortgage company to discuss buying this home. Trust me, they are all up to their eyeballs trying to handle refinances and foreclosures, and will not bother negotiating with you just because you happen to be living in the house. They will foreclose and the house will go to auction unless the actual owner contacts them and pays up.
Your best bet is to get the owners’ contact info from the property manager and see if you can buy it out from under them. This is not likely if they walked away from the payments already.
Next best bet is to buy the house at the foreclosure auction. This will work only if the bank or other company holding the mortgage actually offers it at a price reduced from what is owed on it.
You can also find a list of homes in your area that are in foreclosure each month. Many of these will go to auction, and you can bid on one there. The only problem is that you have to pay cash or certified check immediately for the house you purchase. An approved mortgage will not work; closing of the sale takes place immediately after the auction.
A lot of banks have this strange idea that they can sell the house at auction for about what is owed on it - in a market where prices have declined by double digits, and houses currently for sale sit unsold for long time periods. That is why lots of banks have huge lists of properties on their books, but aren’t getting any money for them. While this is stupid on their part, when they could at least get 50 to 70 percent of the mortgage value immediately at an auction, they continue to do it. Go figure
And good luck with the foreclosure thingy.
January 18th, 2009 at 10:51 pm