Q: Our daughter found a notice of default on her front door last week, telling her that foreclosure was imminent. She called the owner, who straightened things out with the bank, but we’re really worried that our daughter will eventually be displaced by a foreclosure. What can we do to protect her interests? If she moves, what can we do to make sure she won’t end up with a home that gets foreclosed? –Peggy M.
A: Until recently, protecting the interests of in-place tenants when their rental is in foreclosure was strictly a matter of state law. In most situations, the mortgage predated the lease, and the tenants lost their leases when the bank foreclosed. Some states gave tenants a longer notice period than they’d otherwise receive, but the bottom line was that the lease was over.