Foreclosure of house with rooms rented out?

Question

My dad's house is in foreclosure. He got a letter stating it could go up for sale anytime after 8/16. He has cancer and his doctors say he has less than six months to live, and he wants to go home for hospice - He's lived in this house for over 30 years. I've been trying to negotiate with the lender to just give him a little more time, but have had trouble getting a hold of the right person. There's pretty much no chance the lender would delay the foreclosure out ot the goodness of their heart, right?

He rents out three rooms in the house. My understanding is the bank has to go through a formal eviction for renters. How long does that take? I'm wondering if my dad and his wife could just continue to stay in the house until the renters are evicted. If it takes as long as a regular eviction I think it would be enough...

If anyone has any other ideas, please let me know... Thanks.

Answer 1

Eviction takes 30 days and banks ususally start the process before they actually take ownership.   It generally takes the sheriff 72 hours to show up to remove anyone in the house after that.

If this was my father I would just pay whatever he owes since he apparently feels entitled to refuse payment.

As far as "goodness of their heart", your father took money from them and their investors, they have a legal obligation to recover their investors funds.    This is business for them, your father should also repay the money he spent, but is not, and should not be expecting it to be a gift.

Answer 2

Foreclosure procedures vary both by state and by the lender, so it's impossible to give you precise advice. Also, I'm not a lawyer, so this isn't legal advice. For that, you need a lawyer. However...

The bank would be dealing with your father, not with the renters. The bank would foreclose on your father, then either put the house up for auction or simply take it as an REO (real estate owned). That leaves the renters in limbo. At some point, either the purchaser at the auction or the bank (if it became the owner) would evict anyone remaining in the home. But the procedure is: Foreclosure first. Then eviction.

Eviction proceedings are highly dependent on local laws. Could be 30 days; could be 90 days; perhaps could be longer.

As for negotiating with the lender, as you see that can be difficult. Often, it's very difficult. You have to be very, very, very persistent. By that, I mean call every hour. If it's a local bank (not one of the national banks), with headquarters near where you live, that's much, much better. In that case, you can actually go there and try to speak to someone. Odds are still difficult, but it's worth a shot.

Another possibility, if it hasn't been tried yet, is a short sale. Contact a Realtor for details. Basically, it's selling the property for less than is owed on it. The lender has to agree to accept less than is owed. Short sales can be difficult, complex, and time-consuming. But, if you haven't explored that option, you should.

Finally, if there's sufficient equity in the property, try selling it either conventionally or to an investor. Frankly, although selling it conventionally will bring in more money, time is probably too short for that. Still, ask a Realtor for a CMA (competitive market analysis) to determine whether that'd make sense.

If there's a lot of equity in the property and you need to sell it quickly, contact one of the "We Buy Houses" companies. You'll get less for the property, but they are able to purchase in 2 weeks or less. (Disclaimers: I'm a Realtor and I also have a "We Buy Houses" type company.)

Finally, I assume your dad's being treated for his cancer. Check with the hospital or doctor and ask what services are available for patients in financial distress. They may be able to suggest some things to do.

Hope that helps.

Answer 3

Eviction takes about 30 days.

My advice to you is forget about your dad's home and concentrate on making room for your dad at your house so he can be cared for by family in his final days.