Risk of Foreclosure?

[<Red Zephyr>]

You don't know if the house is being foreclosed yet; it is possible the papers you saw are about another matter entirely. Foreclosure is a process similar to eviction; it does not take place overnight, and ample notice is given to all parties. If your lease is subordinate to the home's mortgage (and virtually all are), then you could be forced to leave on 90 day notice.

The GOOD news about foreclosure for tenants is that it sometimes presents an unparalled opportunity to buy the home they've been renting. True story: My boss lived as a tenant in Queens in a 2-fam house that was foreclosed. The bank let him stay in the house after they took possesion of the house and didn't even collect rent for 5 months. During that time, he contacted the bank and arranged to buy it for slightly more that the remaining mortgage balance (banks hate to hold onto foreclosed properties). The same bank even financed him. He now owns the house he lives in, and the rent he collects from the apartment covers his mortgage. If you get this type of opportunity --- grab it.