Mortage Crises Also Hurting Renters

[erpowers]

It seems to me that people are not hearing very much about renters in terms of the mortgage crises, but renters are also being hurt. It seems that every day we hear about how people are having to move out of there houses because they defaulted on the loan for their house. However, I do not think we hear about what happens to renters if they pay their rent on time and the company or person who owns their apartment complex defaults on the loan for the complex.

Today, I read about how the mortage crises is affecting renters. It appears that all across the country companies are defautling on the loans they used to buy apartment complexes. If and when these companies default on the loans the property can be bought by investment firms like Deutsche Bank and Bank of New York, or mortage loan trusts set up by groups like Citigroup. Some of these groups seem to be know as investment pools. Since these groups do not want to be landlords they decided to evict all the tenants and then sell the building. The groups think vancant building are easier to sell.

Rep. Barney Frank either has introduced legialation meant to help in this situation or will introduce the legislation soon. The links below will give more information about the issue.

http://www.boston.com/realestate/news/articles/2007/10/21/default_crisis_is_evicting_renters/
http://www.jimhightower.com/node/6308
http://www.startribune.com/business/11245186.html

[AlCzervik]

1. The people that lived next door to me were renting and the house went into foreclosure

they had to move out right before christmas. they were renting month to month but had planned on staying, now the house is empty and it's being auctioned off in a couple of weeks.

[Howardx]

4. thats happened a couple times in my complex

small townhome complex in socal.

[DaveJ]

2. I'm sure there are exceptions, but often, one hell is as good as another

Renter's Hell. I personally have nothing vested in my apartment. If I had to move to another one I'd be happy for a change in scenery.

[Earth_First]

3. However if you had children (perhaps you do)

A possilbe change in school district's midriff can be distruptive to the children.

[DaveJ]

5. One can't find another apartment in the same district?

I suppose that's possibly a problem in smaller towns.

BTW, I did have a couple stepdaughters and stayed in one place for their benefit, passing up job opportunities and all. I know it is not a good idea to move kids around. I had to go through that and it was horrible.

[Gormy Cuss]

6. It's not just a problem of smaller towns. It's also an affordability issue in larger communities.

If you've been renting the same place for several years you may be paying slightly less than typical rents for similar properties because many landlords recognize the value of keeping good tenants in terms of costs. If advertising and doing background checks on new tenants costs the equivalent of one month's rent, it's easier and just as profitable to avoid the process and pass on some of that savings to tenants as an incentive for them to stay. This tends to be the case with smaller scale owners rather than the large management companies. So if you've been one of those lucky tenants, your next place in the same school area may cost a bit more be unaffordable.

Then there's availability. In some communities the amount of rental stock is low.