Foreclosure! Prevention and help for homeowners and renters Published May 28, 2008 By 60th Air Mobility Wing Legal Office TRAVIS AIR FORCE BASE, Calif. -- For those contemplating foreclosure options, or renters wondering what rights they have if a landlord is foreclosed on - this article is for you. Below are some helpful tips to help homeowners prevent a foreclosure: -- Face the problem. The longer you wait, the less options you'll have. -- Talk to your lender. Find out what options might be best for a particular situation (i.e. reinstatement, forbearance, repayment plan, mortgage modification, partial claim.) -- Check the mail. Ignoring late notices or a foreclosure notice will not stop the process. -- Know your rights. Read loan documents and check out resources (see links below). -- Contact a Housing and Urban Development approved housing counselor. They can help you understand the law, layout your options and even represent you in negotiations with lenders. See HUD website link below or call 800-569-4287 -- Prioritize spending. Cut back on optional expenses and talk to credit card and student loan lenders about deferments or forbearance. -- Avoid foreclosure prevention companies. A fee is not needed to get help. -- Beware of foreclosure recovery scams. These scams will promise to stop the foreclosure process, but they are really having your turn your house over to them so you become a renter in your own house. Don't sign anything you don't understand. Helpful Websites: Federal Housing Administration - Avoiding Foreclosure: http://portal.hud.gov/portal/page_pageid=33,717348&_dad=portal&_schema=PORTAL U.S. Department of Housing and Urban Development - Avoiding Foreclosure in California: http://www.hud.gov/local/ca/homeownership/foreclosure.cfm Renter's rights vary depending on whether the landlord took out the mortgage before or after the lease was signed. If the lease was signed after the landlord took out the mortgage, then a foreclosure will invalidate the lease. If the mortgage was taken out after the lease was signed then there are many options available to the renter that can be discussed in more detail at an individual appointment with the legal office. All renters will benefit from a visit to the base housing office to learn about other options and resources. Below are some helpful tips for renters: -- Your landlord must give you 30 days notice before moving out. The notice must be in writing and either served on you, or mailed and posted on your door. -- A person cannot be arrested for not moving out. If someone hasn't moved out in 30 days after getting notice then the landlord can take them to court to have them evicted. This process may allow for additional time, but it will hurt a credit score and ability to rent at another location. -- Cash for keys. Many lenders/landlords will offer a renter money to move out early. Before accepting the offer, make sure you have a place to go and get the offer in writing. The housing office on base can help renters with these types of negotiations. -- If the landlord doesn't give back the security deposit, the lender must. California law states that the lender will have to re-pay your security deposit if the landlord failed, assuming there is no reason to keep it. -- A renter may sue a landlord for violating the lease if the landlord is foreclosed on forcing the renter to move before the end of the lease term. A court may award moving costs, rental application fees and the difference in rent for a comparable rental. This is often done in small claims court (see link below). Helpful Websites: Housing Education Program - Renter's Rights in Foreclosures http://www.housingeducation.org/education/publications/rentersrights.html California Tenants Guide to Rights and Responsibilities http://www.dca.ca.gov/publications/landlordbook/catenant.pdf California Bar Association - Small Claims Court FAQ http://www.calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10581&id=2175 Mortgages, Leases and the Servicemember's Civil Relief Act For those who financed a house or signed a lease prior to entering the military then SCRA has many options to help you. For most of us, this does not apply because we bought the house or signed the lease after entering active duty. Contact the legal office to set up an appointment to discuss this in further detail.