Foreclosure, Loan Modification, and Long Term Lease Agreements (short sale, 2014)

[Prophet831]

About 14 months, after selling my house in a short sale, I moved into my realtor's rental property (Sept.2012) after previous tenants had moved out and the property was in foreclosure. The realtor and I had an understanding that there was a possibility that I would have to move should the complaint materialize and the bank was able to take possession of the property. I moved into the property "as is." The previous tenant paid $2800 per month and was pretty much responsible for everything with regards to repairs and maintenance of the property. I signed a lease for one year at the rate of $1400 per month, due to the fact that there was uncertainty about the property. I was employed part-time and am collecting a pension.

In April 2013, the owner had continued to try and get a loan modification and had been having a difficult time providing documentation. I had expressed interest in helping her out by staying in the property if the loan modification went through. She had estimated that the new amount would be $3100. I told her I could afford $2800 with the additional income coming from a new marriage. I sent her an email indicating that we would be ready around July or August, but the modification had not been approved. I was staying in the property because the owner and I had a trusting, reciprocal relationship. Since I was not prepared to get married until after October it worked out for both parties.

In August 2013, I received a copy of the amended complaint, the civil action - mortgage foreclosure. In the complaint, I am made party Defendant to the foreclosure action for any interest I may have in, to or against the premises by virtue of my tenancy. In this regard, the Plaintiff is seeking to extinguish any leasehold interest in the property but will not seek possession if the tenant is covered under the Anti-Eviction law.

The owner requested an increase in rent from $1400 to $1600 for the month November via a phone call. I was not given the 30 day written notice to quit and notice of the rent increase. By law, the notice to quit ends the current tenancy that has now gone into a month to month status to enter into a new period.

Shortly thereafter, I indicated that I would I need a new lease (with the current increase of $1600 and with an understanding that a revised one would be drafted when the modification was approved) since I was getting married November 30th. I needed to register my new daughter in the school for January 1, 2014.

The owner proceeds to request through email the specifications of the new lease beginning December 1 for $2800, a month and 1/2 security (total of $6800) and some very one sided tenant responsibilities all due by December 1. When I inquired about the status of modification, what used to be an open and honest conversation now went to "this is my private information."

After contacting the attorney's office for the plaintiff, i found out that the foreclosure is on hold due to the modification application process.

Here are my concerns:

1). The owner once again did not follow the proper 30 day written notice to quit and notice of rent increase which while requesting credit reports, proof of income of all household members etc, which is within her rights, but it feels like a decoy from the real issue at hand.

2). In the complaint, the owner had defaulted on a previous modification agreement and the mortgage on this property has not been paid for almost 3 years. The money I have been paying to them from rent has not been paid to the bank as indicated in the complaint with regards to the outstanding balance.

In this scenario, what guarantee do I have that the modification has been approved again, and that the owners will pay the bank?

I have maintained the property in "as is condition," but there is great need for investment for major landscaping damage caused by Sandy and lack of annual maintenance.

I understand that under the law, I am protected if I we sign a long term lease, but this protection amounts to either honoring the lease term or 90 days to move (if it is sold and owner occupied).

Any thoughts or suggestions are welcomed.

[teachbeach]

I think you hold the ball here, and should probably look for somewhere else to live. It is my understanding that when the bank holds the property the "landlord" is now the bank and you will be dealing with them, not the previous property owner. I think her amendments or modifications are an attempt to keep getting money from you, thinking she's playing a waiting game with the mortgage or bank, when in reality the bank is going to get this property.