Tenants and Foreclosure
When the bank forecloses on the landlord, most tenants can stay in their rental.
The federal Protecting Tenants at Foreclosure Act of 2009 (PTFA) ensures that renters have adequate time to find alternative housing after the home they’re living in gets foreclosed.
In California, the new owner of a foreclosed property must perfect title before serving tenants with a three-day notice to quit.
If you lose your home to a foreclosure sale, the new owner might offer you a lump sum to voluntarily move out. This kind of transaction is called “cash for keys.”
At a foreclosure sale, the foreclosing lender usually makes a bid on the property using what’s called a “credit bid.”
An acceleration clause in a mortgage allows the lender to demand full repayment if you default on the loan.
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