Do You Know What You Are Renting?

Recently I was helping a tenant client find a rental home.  After a few days We found the perfect rental. The agent was clear that this particular property was in Pre-foreclosure. The home was going to rented to my clients so the bank could recoup some of their expenses.  Since the home was in Pre-foreclosure, and the home owners had moved out, the bank held off from foreclosing to recoup some of their loses.  At least that was what we were told.

My clients were ready to move. They could save money after moving in.  Once the lease was over my clients would be given the right to purchase.  What a fantastic scenario.

On Friday, the 17th of August, we went to the home. My clients were ready.  They hired professional movers, two cars were loaded with items and checks in hand. The realtor, that was represented the bank, was their ready to turn over the keys. He walked up to the door to find out that the locks had been changed and a new notice on the door stating that this home was in the possession of Fannie Mae. The banks attorney had proceeded with the foreclosure process and Fannie Mae had taken possession of the home.

Unbelievable!  My clients had already moved out of the home they were renting because that home owner hadn’t paid his mortgage or association fees.  What a terrible situation.  They had to move their belongings into storage and stay into the hotel until today, August 21st, 2012.  Yep we found a rental.  Whew!

What’s the moral of this story?  Before renting a home make sure it’s not in pre-foreclosure.  If it is make sure the bank has the right to rent it out.  Do your research and ask questions.  Maybe banks should just stick to lending money and not becoming property managers.

My story ended well. But can you imagine how many people end up renting properties just to find out the home owner isn’t paying the mortgage.