Tenants nationwide who did nothing wrong except to rent from a defaulting owner are suffering from the mortgage fallout as well. In most states, foreclosure voids leases and banks move quickly to get tenants out. Banks traditionally press renters to leave quickly so that they can resell the property. Depending upon the state, tenants get between three and 30 days notice and a few states have laws protecting tenants from eviction in the event of foreclosure and others are moving to give renters more notice. In many cases, the homes and apartments entering foreclosure are owned by investors who got low-rate teaser mortgages and intended to hold the buildings for a few years and then sell them at a profit - before their mortgage rates rose. Now, with the housing market depressed in many markets, the owners can't sell the homes or afford the higher mortgage payments. So, if you are a renter you might want to check on the financial health of your landlord, watch for signs that they may be in trouble, especially if you know they have recently purchased the property. A large number of recent investors are unsophisticated and do not know how to handle negative cash flow. Here are a few warning signs: 1: Non-Payment of the water bill. 2: Diminished services - has the gardener stopped coming by? 3: Deferred maintenance - has the roof been leaking for a while now? This week's Real Estate Insight: If you are renting, do yourself a favor and check out your landlord's financial health, otherwise you may be an unexpected casualty of foreclosure.Renters Feel the Fallout from Foreclosures
- By Michael McCann
- Posted
Tenants nationwide who did nothing wrong except to rent from a defaulting owner are suffering from the mortgage fallout as well. In most states, foreclosure voids leases and banks move quickly to get tenants out. Banks traditionally press renters to leave quickly so that they can resell the property. Depending upon the state, tenants get between three and 30 days notice and a few states have laws protecting tenants from eviction in the event of foreclosure and others are moving to give renters more notice. In many cases, the homes and apartments entering foreclosure are owned by investors who got low-rate teaser mortgages and intended to hold the buildings for a few years and then sell them at a profit - before their mortgage rates rose. Now, with the housing market depressed in many markets, the owners can't sell the homes or afford the higher mortgage payments. So, if you are a renter you might want to check on the financial health of your landlord, watch for signs that they may be in trouble, especially if you know they have recently purchased the property. A large number of recent investors are unsophisticated and do not know how to handle negative cash flow. Here are a few warning signs: 1: Non-Payment of the water bill. 2: Diminished services - has the gardener stopped coming by? 3: Deferred maintenance - has the roof been leaking for a while now? This week's Real Estate Insight: If you are renting, do yourself a favor and check out your landlord's financial health, otherwise you may be an unexpected casualty of foreclosure.
