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Renters

Surprised by foreclosure
notice

When you pay rent on a house you
expect to be able to live there. Laura
Morataya did -- until she checked the
mail recently.

"I received the notice probably about a
month ago saying that the house was
going to go to public auction," said
Morataya.

Records show the owner has fallen
behind on payments. Morataya says he
never told her.

"It's scary," she said. "I have a 1 year old
daughter. Me and my husband are
struggling to get by. Like most people,
we live paycheck to paycheck. I have no
money saved up. If he had given us a
little notice, a month or two months, I'd
have put a little money aside. But I have
nothing."

She's not alone. While investigating the
story, we found out that Laura's
neighbors are in the same boat and
their house is owned by the same guy.

Dustin and Kristen Barngrover say
they've been paying their rent every
month, not knowing what was going on.
Luckily, they were already in the process
of buying a house when they got their
letter.

"What if we didn't have a place to go to?"
wondered Krisen Barngrover.

"We have a kid. She needs to eat. She
needs to have air conditioning. If we
hadn't been looking for a house. We'd be
in big trouble right now."

homeless

By Tamara E. Holmes • Bankrate.com         


Think you're exempt from the financial fallout
of the downtrodden real estate market
because you're a renter? Think again.

If your landlord is facing foreclosure, you could
easily end up on the street as well.

There were 223,538 foreclosure filings in
September 2007, up almost 99 percent from
the year before, according to figures from
RealtyTrac, a company that tracks foreclosure
activity. And it's not just borrowers losing their
personal homes -- in many cases lenders are
foreclosing on rental properties. Because
lenders are not usually interested in
managing rental properties, tenants are
finding themselves displaced in the process.

"It's a real bad problem," says Ken Volk,
founder of Arizona Tenants Advocates &
Association, an organization that promotes
tenants' rights. The influx of tenants contacting
his organization in the last three to six months
has prompted Volk to compile information on
the topic at his Web site, arizonatenants.com.

Not only are tenants being forced to leave, but
because they generally have no knowledge of
the landlord's deteriorating financial situation,
they are often taken by surprise.

"They (landlords) see foreclosure coming
many, many months away. But they may not
communicate this to their renters, so this can
sneak up on renters," says Brian Sullivan, a
spokesman for the Department of Housing
and Urban Development, or HUD.

In many cases, renters find out that the home
or apartment they're renting has been
foreclosed on when they are informed that an
eviction notice is forthcoming from the lender.
Such a notice gives renters a chance to
willingly vacate the premises before eviction
proceedings take place.

Even if the renter's lease isn't up for another
six months, renters may get only 30 to 60 days
to vacate the premises once evicted, because
in most states a foreclosure makes a lease
obsolete. Because the lease signed by the
renter is no longer in effect, the lender or new
owner also isn't obligated to perform any
maintenance tasks or continue any other
amenities the renter may be used to, with the
exception of keeping on basic utilities such as
electricity and water.

While it's almost impossible to know if your
landlord is having money problems, if repairs
suddenly start going ignored or if your
landlord becomes more unresponsive to your
needs, you may want to consider this
possibility before signing a new lease.

If you do find yourself in the position of having
to vacate a property that's been foreclosed on,
your options are likely limited.
By Bruce Spence
Record Staff Writer
October 28, 2007 6:00 AM

Beth Stoneback lost her home to foreclosure this month,
and she wasn't even a homeowner.

Stoneback, a local high school home-economics teacher, got her own hard
lesson in home economics: She found out only when an auction-sale notice
was tacked to the front door that the home she rented for $1,300 per month
was going up for foreclosure auction

The property-management agent told Stoneback she was surprised,
because the landlord hadn't told her the house was in foreclosure.

Then Stoneback found herself temporarily locked out of the house overnight
when the locks were changed by a real-estate agent representing a new
foreclosure owner with no idea there were renters in the place.

"It was kind of weird," said Stoneback, who, with her daughter and
son-in-law, was in the midst of relocating to another rental home.

Stoneback knew of the growing foreclosure problems in the area, but it never
occurred to her that it would affect her.

Foreclosures rise

Such can be the story when renters of houses owned by investors end up in
foreclosure. And there have been increasing numbers of foreclosures.  

Kevin Moran, a Coldwell Banker Group real estate agent specializing in
foreclosures, estimated that about three out of 10 of the foreclosed homes
he handles involve tenants.

According to the foreclosure-data firm RealtyTrac, there were 1,932 home
foreclosures countywide in the first nine months of this year.

Sometimes there can be double the pain.

Rosa and Alex Lejis lost their home to foreclosure earlier this year because
they were facing insurmountable payments from an adjustable rate
mortgage reset two years after buying.

Already struggling to make their $3,200 monthly mortgage, Rosa Lejis said,
they were looking at monthly payments as high as $4,000.

"We counted on being able to refinance," she said.

The house for which the Lejises paid $500,000 in May 2005 is now on the
market recently as a foreclosure property for $299,000.

In April, they signed a one-year lease for a five-bedroom home in the
once-booming interstate corridor.

Lights go out

Recently, she called Norbert Huston, a property-management agent
handling her rental, about a power outage that blew out the dishwasher and
air-conditioner.

"He kind of sounded frazzled," she said. "He told me, 'You need to sit down. I
just found out that the homeowners are losing the home you're currently
renting.' I got the sensation you get when someone punches you in the
stomach."

Even with the trauma to her family she feels sympathy for the homeowner
and harbors no ill feelings. "I feel bad for them, because I've lost a home
myself," she said.

Huston said the owner wasn't in foreclosure trouble when the Lejis family
rented the home in the spring.

The owner of the Lathrop rental house didn't respond to a request for an
interview.

Fearing another strike

Lejis said the whole experience has been overwhelming, and she fears
renting another home because of qualms that foreclosure might strike again.

"It seems like it's melting all around us," she said.

Foreclosures began creating problems a couple of months ago because
most of the landlords in foreclosure trouble have failed to report that, said
Trudy Miller, the Property Management Experts agent who handled the
Stoneback rental house for its owners in Hawaii.

Thirteen of her clients have had rental houses go into foreclosure, Miller
said. Only two told her what was coming.
Before You Rent

Always check the Larimer County website to see if the property you are
applying to lease is going into foreclosure

click here for Larimer County foreclosures and search
by the property address