Foreclosures Stinging Tenants

August 13th, 2008 | Tags: Foreclosure Victims

Foreclosures are stinging tenants thanks to the landlord cum investor failing in making mortgage payments. The renters find themselves evicted with little or no notice.

James Austin is one of the many foreclosure victims who is a tenant. He was surprised when one fine day a realtor turned up and began to take snapshots of the house he was living in as a tenant for the last one year. Casually, in passing the real estate agent told him that the house had been foreclosed. Austin somehow quickly managed to rent another house in Bowie. But history repeated itself. Soon after he and his three teenaged children moved in they discovered that this house too was foreclosed. 38-year-old Austin is a consultant in a house security firm. He looked shocked as he said, “Twice – can you believe it?” The last landlord did not look like the type who would do this to a family. Here the question of the ‘type’ arises!

Thousands of gullible renters are facing the same situation. They have been paying their rents timely but yet they have got ensnared in this foreclosure crisis raging the country for absolutely no fault of theirs. So far they have little protection from the law. The rent contract vanishes with the landlord. It has nothing to do with the new owners.

Most of the landlords in trouble were the investors of the previous years. They invested in housing during the boom years, rented them out and thought that with prices rising they would sooner than later be able to sell it roping in high profits. But the bubble burst. The tenants know nothing about this as their lives turn upside down.

Community advocates as well as the government is trying to make laws that will give some relief to the renters by allowing for some time for them. It is usually the banks that evict them. New regulations favouring the renters are coming into effect in Baltimore. Columbia district plans to advertise through the television medium informing the tenants that they too have rights.

William C. Apgar of Harvard University commented that previously the focus was on the problems of house owners but now the problem of renters is “bubbling to the top”. With the start of foreclosure proceedings the lease agreement becomes null and void. It means renters can be quickly evicted even without getting a chance to realize their security deposits.