owners have not made their mortgage

[aries6591]

payments, heading to foreclosure? we are renting a house and have made payments to the owners through a leasing co. the last 3 months our payments have been going to the owners at $1242.00 per month ... and I feel that they are pocketing the money! collection agency is asking for payment in full from the owners in the amount or over $3,000.00,....my question is are we still obligated to pay rent and to whom if it looks like they are defaulting in their payments? .. we opened a letter to the owners stating to "cure" or "reinstatement right" and they are also seeking payment for next month. (december) and also regarding foreclosure..where does this leave us? what are our rights? what happens after December? we have been here for the last 2 years in good standing. My room mate wants to continue paying rent and I say no. what is legally correct? does this mean that they filed banckruptcy??

[Becca/FL]

Investment property mortgages have an addendum to the mortgage called 1-4 FAMILY RIDER
(Assignment of Rents). The addendum outlines what happens if the loan goes into default. Keep paying your rent and get receipts and copies of your canceled checks.

Below is verbiage is taken from the Fannie Mae/Freddie mac multi state uniform instrument form 3170.53

>>>G. ASSIGNMENT OF LEASES. Upon Lender’s request after default, Borrower shall assign to Lender all leases of the Property and all security deposits made in connection with leases of the Property. Upon the assignment, Lender shall have the right to modify, extend or terminate the existing leases and to execute new leases, in Lender’s sole discretion. As used in this paragraph G, the word “lease” shall mean “sublease” if the Security Instrument is on a leasehold.
H. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION. Borrower absolutely and unconditionally assigns and transfers to Lender all the rents and revenues (“Rents”) of the Property, regardless of to whom the Rents of the Property are payable. Borrower authorizes Lender or Lender’s agents to collect the Rents, and agrees that each tenant of the Property shall pay the Rents to Lender or Lender’s agents. However, Borrower shall receive the Rents until: (i) Lender has given Borrower notice of default pursuant to Section 22 of the Security Instrument, and (ii) Lender has given notice to the tenant(s) that the Rents are to be paid to Lender or Lender’s agent. This assignment of Rents constitutes an absolute assignment and not an assignment for additional security only.
If Lender gives notice of default to Borrower: (i) all Rents received by Borrower shall be held by Borrower as trustee for the benefit of Lender only, to be applied to the sums secured by the Security Instrument; (ii) Lender shall be entitled to collect and receive all of the Rents of the Property; (iii) Borrower agrees that each tenant of the Property shall pay all Rents due and unpaid to Lender or Lender’s agents upon Lender’s written demand to the tenant; (iv) unless applicable law provides otherwise, all Rents collected by Lender or Lender’s agents shall be applied first to the costs of taking control of and managing the Property and collecting the Rents, including, but not limited to, attorney’s fees, receiver’s fees, premiums on receiver’s bonds, repair and maintenance costs, insurance premiums, taxes, assessments and other charges on the Property, and then to the sums secured by the Security Instrument; (v) Lender, Lender’s agents or any judicially appointed receiver shall be liable to account for only those Rents actually received; and (vi) Lender shall be entitled to have a receiver appointed to take possession of and manage the Property and collect the Rents and profits derived from the Property without any showing as to the inadequacy of the Property as security.
If the Rents of the Property are not sufficient to cover the costs of taking control of and managing the Property and of collecting the Rents any funds expended by Lender for such purposes shall become indebtedness of Borrower to Lender secured by the Security Instrument pursuant to Section 9.
Borrower represents and warrants that Borrower has not executed any prior assignment of the Rents and has not performed, and will not perform, any act that would prevent Lender from exercising its rights under this paragraph.
Lender, or Lender’s agents or a judicially appointed receiver, shall not be required to enter upon, take control of or maintain the Property before or after giving notice of default to Borrower. However, Lender, or Lender’s agents or a judicially appointed receiver, may do so at any time when a default occurs. Any application of Rents shall not cure or waive any default or invalidate any other right or remedy of Lender. This assignment of Rents of the Property shall terminate when all the sums secured by the Security Instrument <<<