Foreclosure attorney Gregory Wilde says case law allows banks to evict any renter from a foreclosed home. Anything less “wouldn’t be fair to the banks” that are saddled with these homes by delinquent owners.
Banks and mortgage companies have the upper hand, Deputy Attorney General Ernest Figueroa agrees. “The mortgage company has the secured lien on the property,” he says. “Once they foreclose on it, they can do whatever they’d like to do.”
The renter could try to take the landlord to small claims court. But a foreclosure generally indicates the landlord is already in financial distress, so trying to collect on any judgment “could be an exercise in futility,” Figueroa says.
The laws aren’t stacked entirely against the renter, however. There is a little-known and seldom used tactic that renters can employ to try to ensure they are notified of the start of the foreclosure process, which usually takes about four months to complete.