I'm very happy that many metro areas are giving tenants the right to use the property for at least 30 days after a foreclosure, but I am also a little afraid that some cities are giving tenants a little too much time. In some cases up to 60 days and that amount of time impedes the disbursement process.

Grant, a federal law passed last year entitles month-to-month renters to 90 days' notice from the foreclosing entity before having to move out. Those with leases are permitted by law to stay until that lease runs out. (There are some exceptions, but that's the main idea.)

JSH- great ill take a 30 year lease at $250 month on a foreclosure then.

It must be a bona fide lease made with a non-family member and include "rent that is not substantially less than fair market rent."

100 years at $1 a month was the first thing I thought of but they did close this loophole. The federal law ends Dec 2012, but MD passed a mirroring law that has no sunset I'm aware of. Speaking with an attorney I was told that "not substantially less" probably means about 70 cents on the dollar is as low as you can go.

How you can really push and test this is to see if it applies to boarders who rent just a room within the house. Control a room and you effectively control the entire house for purposes of keeping it from the bank. 70 cents on the dollar of what it would cost to rent a room might have you in that $250/month range, but you'd probably only be able to keep it a year or two at the most.

This really has the potential to help even homeowners stay in their home.

Thanks for jumping in, Josh -- I was going to add the fair-market-rent clarification, but your point about boarders is really interesting.

I'll put it to you this way: if I were a homeowner facing foreclosure, one of my defense strategies would be got get a border tenant and find out.

This law was created as a "self administering" law, meaning that no specific agency is tasked with enforcing it or spreading knowledge of it. It's basically left up to the courts to determine its application. Unlike the tax credits, your Realtor or loan officer have no interest in spreading this info, if anything it will reduce sales activity and therefore be in their best interests to have as few people as possible know it.

Ok then Ill take a lease at fair market value for the next 40 years-no increases. 40 years ago you could rent a place at less than 10% of current rents (im guessing). I suspect the math will be the same 40 years from now.

ON another note. Look at what $300-400k buys you in some parts of baltimore county. Its ridiculous. Only people with high net worth (cash liquid assetts, not *equity*) should be buying in this price range. A circa 1950's cape cod with a .25 acre in white marsh is NOT a reason to spend this kind of coin. I cant decide who is dumber. The people that ask these prices or the people that actually pay it. I think they should have a new standard underwriting guideline. Usually you are required to have 3 months reserves of PITI to qualify for most loans. Chnage that to you must have 10% of loan amt liquid reserves in a non -retirement account.