The property I live in is being foreclosed - How can I buy it?

[Patrick H.]

Hello,

I am renting a home in AZ currently in month 15 of a 36 month lease.  I just received a certified letter today stating that the home is up for trustee sale in 3 months.  The property is being managed by Renter's Warehouse and I do not have any contact information for the homeowner (other than their address in the Notice of Trustee Sale).

How can I go about starting up a discussion with the owner to purchase the property?  Should I go through Renter's Warehouse or send a letter to the address in the Notice of Trustee Sale (that seems a little creepy to use her address in the form like that)?  It looks like they have failed to make payments since April (we have been paying rent on time, auto-withdrawn from bank account).

Ideally:  I'd like to have the loan/trustee waive all fees and interest, potentially lower the asking price ($10,000 discount on a $160,000 outstanding balance of a home that would likely appraise for $185,000) and we'd immediately go through the purchase process as is.

Do I need to bring the Trustee into the discussion with the owner at the same time to make this deal go through?

Thanks for your time!
Patrick

[Greg Scott]

@Patrick H.

Let's back up a bit.   I want to confirm that you realize that this means you are likely to be kicked out of the house in about 4 months.  You know that, right?

The other interesting thing here is that he owner clearly has not been paying their mortgage.   In effect, this means they have invalidated your lease because they cannot guarantee you can use the property for 20 more months.  So, the very first thing I would do is stop sending in rent payments.  (Drives me crazy when unethical landlords stop paying mortgage but keep collecting rent.)   Instead, you should open a new bank account and send your rent payments to that account.  Then inform your property manager of what you did and why.  (You may want to talk to a local lawyer to ensure you are complying with local laws on this)

This will have three effects, 1) it screws your unethical property owner  2) It protects your monies which you might get to keep after the foreclosure and 3) gives you leverage with the bank that is foreclosing.  They might be interested in obtaining these funds and if they are in this legal limbo area, you have some negotiating power.  Give the funds to your unethical property owner and they are gone forever.