What happens to the interests of tenants in the case of foreclosure on a property owned in joint tenancy?

In the context of foreclosure on a property owned in joint tenancy, the interests of tenants are extinguished when a foreclosure occurs. Joint tenancy involves a right of survivorship, meaning that if one joint tenant passes away, their interest automatically transfers to the surviving tenants. However, foreclosure alters this dynamic by satisfying a debt owed on the property through a legal process that typically cancels the ownership rights of the joint tenants.

When the property in joint tenancy is foreclosed upon, the lender seeks to recover the outstanding debt by seizing the property. During this process, the rights of all tenants sharing that joint ownership are effectively negated. The property is taken out of their control, and they no longer hold any interest in it. Consequently, the original agreement of joint tenancy is terminated, leading to the extinguishment of interests.

The option regarding interests transferring to a surviving tenant addresses the scenario of death among joint tenants, not foreclosure. Similarly, negotiating new terms with the lender does not apply, as tenants do not have negotiating power once the foreclosure process is initiated; the lender has the rights to the property and its sale. Therefore, the correct understanding in this situation is that tenants lose their interests entirely upon foreclosure.