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I Rent Property and My Landlord Is Behind In His Mortgage

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I Rent Property and My Landlord Is Behind In His Mortgage

 

Question: I’m a junior in college, and I live in a rental house. There’s no formal

lease, and my landlord never asked for a deposit of any kind. Recently, I

started receiving notices from Chase Mortgage saying that my landlord is

$7,500 behind in his mortgage. I’m worried about what will happen if they

foreclose on him. Should I move out, stop paying rent or what? He’s told me

not to worry, because he’s just behind on the payments and not in default.

Dave: Well, the last part is not quite true. When you’re behind on payments, you are,

by definition, in default. Still, I think you should stay right where you are for now

and keep paying your rent on time like normal. Keep the lines of communication

open with your landlord too. I’d also contact Chase and tell them about your

situation in this house. Ask them to keep you informed about what’s happening with

the property, so that you’ll have time to formulate a plan and find a new place to live

if the house goes into foreclosure.

Chances are they’ll give you at least 30 days to move out if a foreclosure occurs. You

probably won’t have to pay anything to the bank afterward, so you may get to sit

there rent-free even longer while they sort out everything. Considering the fact that

you don’t have money wrapped up in a deposit or a lease hanging over your head,

there’s really not a lot of risk for you here.
You might keep an eye out for other properties in the weeks ahead, but other than

that, as a renter, you’re in pretty good shape under the circumstances.

Dave Ramsey Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations and The Dave Ramsey Channel on iHeart Radio. Follow Ramsey on Twitter at @DaveRamsey and on the web at www.daveramsey.com.
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