Investing in Real Estate:Is Your Landlord Headed Into Foreclosure?

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One of the stories reported on regularly these days is tenants facing eviction due to foreclosure of the property they’re living in.

Tenants are going about their business, paying their rent and all of a sudden, they’re served with eviction papers.  Fannie Mae has put an end to this practice with their homes, which I agree is unfair, but their policy has other consequences I find distasteful.

But what about tenants whose landlord’s mortgage isn’t backed by Fannie Mae?  RealtyTrac.com just announced that they are offering a service to help tenants monitor whether the home they’re living in is falling into foreclosure. 

For .95/year, tenants can be notified by RealtyTrac.com. 

Not a bad idea but if you have the time and don’t want to pay .95/year, you can call your town clerk or visit their office and ask to look at the property records for your home. You’re looking for evidence that a lis pendens has been filed, which is usually filed pretty early on in the foreclosure process. 

You may also want to check to see if your landlord owes a higher amount on the property than what it’s likely worth (check the town’s most recent appraisal also on record). If the mortgage recorded is much higher, that could be a red flag that your landlord is in trouble. 

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