Foreclosure crisis catching renters off guard

[flashl]

As landlords default, renters become enmeshed in housing market crisis

Washington Post
By Dina ElBoghdady
updated 6:21 a.m. ET, Fri., Aug. 8, 2008

WASHINGTON - James Austin was stunned when a real estate agent showed up to snap photos of the house he was renting last year and casually informed him the place was in foreclosure.

Austin hastily found another house to rent in Bowie. But soon after he and his three teenage children settled in, that house went into foreclosure, too.

...

Thousands of unsuspecting renters who have been paying their rent on time are getting enmeshed in the foreclosure crisis that is plaguing the housing market.

In many cases, their landlords, often individual real estate investors, bought properties during the boom days, rented them out, then failed to keep up with their mortgages. The homes went into foreclosure, often unbeknownst to the tenants, who face disrupted lives and even homelessness.

Several localities around the country, as well as some members of Congress, are pushing to give renters more time before the new owners, usually banks, can evict them. Such a measure takes effect in Baltimore on Monday, and the District plans to launch television ads this month informing tenants of their rights.

[isentropic]

1. A lot of people got suckered by the infomercials "Live high on the hog from rental cash flow"

and similar bullshit. It's hard to imagine why anyone would think somebody selling the secret to making millions for $59.95 is anything but a scumbag.

[fight4my3sons]

2. This happened to two families I know of.

We just moved and the family that moved into the house that we were renting had to move out of the house that they were renting because the home was in foreclosure. The same thing happened to friends in NY. Both families had been paying their landlords the rent on time. The family who moved into the house that we just moved out of had to find a place in a month's time and the woman is nine months pregnant with two young children. She said it was unbelievably stressful to be in that situation and to have no control over it.

[BlueManDude]

3. I work at a law firm that does foreclosures and evictions - business is very good.