Foreclosures Affecting Rental Market In Many Ways
The escalating rate of home foreclosures is turning more homeowners into renters, but it’s also turning more renters out of their homes. One aspect of the foreclosures crisis addressed recently by USA Today is renter eviction because the landlord defaulted on the home loan. Many of these unfortunate renters recently went through the foreclosure process themselves, so this is doubly traumatic.
Rental units are at an all-time premium now, because demand is high and so are rental rates. So one can imagine how immensely difficult it must be to have the hard-won rental property yanked out from under foot. About 18 percent of foreclosures started in 2007 involved “non-owner-occupied homes,” USA Today reports, citing a Mortgage Bankers Association study.
Maryland Real Estate Blog points out that renters who have signed a lease-purchase agreement with higher deposits are in an even worse position than the typical renter.
“They are in the unenviable position ‘between a rock and a hard place’ — with a lease in place that requires them to stay and continue making payments to the landlord; unable to move to another property without losing their substantial security deposits.”
Although renters obviously aren’t accustomed to doing background checks on the landlord, some limited form of that may be a necessary thing nowadays. Checking whether the loan on the rental property is in default can save a lot of trouble and heartache down the road.
