By Denise Nicholl

I am helping a couple get a VA mortgage loan because they got a NOTICE on their door several weeks ago that indicated the house they are renting is going into default and they have 30 days to evacuate.  They have rented there for 3 .5 years, always paid on time.

They want to use their deposit to go towards the February rent BECAUSE they do not believe the landlord will give them their deposit back IF they make the February rent.  They just got off the phone with the landlord and he said he will not allow the deposit to be substituted for the February rent.  He said if they do not pay him the February rent,he is going to file a 10 day notice of default.  Their loan was approved and it will close on 3/14/09.

What should my clients do.  They have great credit and they don’t want to do something wrong, but they do not trust this landlord OR believe he will give them back their deposit.

What should they do

Edited on: Wednesday, November 3rd, 2010 3:53 pm

2 Responses to “LANDLORD IN DEFAULT”

My response: (We welcome stories, examples, explanations, answers and a touch of your personality)


February 11th, 2009 3:52 pm

At this point I would talk with the bank. The landlord is probably out of the picture now. Look at the notice and read it carefully to see what it really says. If the notice is for a trustee sale then the bank is taking ownership. If it says something else, then check to see what the bank is doing. If the bank is kicking out the tenants, they most likely have ownership of the property.
Talk to the Bank:
Have your mortgage clients talk with the bank. They should be willing to let them know exactly what is going on. They will want to specifically determine whether the landlord has any ownership rights, of if the property is now in their (the banks) possession.
I’m sure you can respect this advice, since you are in the mortgage business… Once your clients figure out what is going on, I suggest they file a complaint with the RPA. It will create a legal paper trail that will show what is happening. The Agent assigned to their complaint should be able to help them know what to do. Most likely, the landlord has breached his contract by defaulting to the bank. This breach of contract will be essential to applying next months rent to their down-payment.
Remember, if the landlord has defaulted on the loan– he is probably several months behind. He’s not exactly trustworthy.


February 18th, 2009 1:57 pm

This same thing has happened to me. I just got a notice from the bank that my landlord is in foreclosure. I can’t believe this jerk would not tell me about it. I’m glad I found this website, I’m filing a complaint right now. I hope it helps, and if not at least I will have done what can be done. Stupid landlord, he forclosed on his rental property then acts as though nothing is wrong.


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