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From Foreclosure To Rental Troubles

[Aug 5, 2008.]

 

Homeowners who lost their home to foreclosure are now facing significant problems when it comes to renting. Landlords and property managers are reluctant to rent homes and apartment units to those former homeowners seeing that foreclosure as a sure sign of continued economic distress.

Credit checks are standard policy for many landlords as a way of weeding out who is reliable for the monthly rent and who is not. A foreclosure puts a huge blemish on the credit report causing landlords to shy away from those applicants.

The amount of foreclosures has been hitting record highs the world over and with adjustable rate mortgages preparing to reset this fall; those numbers will only continue to rise.

Various studies have shown that those who are either undergoing foreclosure or just finished the process tend to have other delinquent accounts either credit cards or other loans. This is the reason behind the red flag thrown up by landlords who are looking for applicants capable of meeting the rent on time and in full.

Many former homeowners are renting from individuals other then companies. By dealing with the actual owner of the property these former homeowners are able to by pass credit checks or are capable of working out a deal.

For those with a foreclosure blemish should expect a difficult time in finding a rental property. If they manage to find a new residence from a landlord they need to expect higher security deposits, an extra month of rent upfront, and even higher monthly rent.

Landlords do understand the dilemma faced by home owners that have just lost their house but most are not willing to risk a tenant unable to make the rent.

Homeowners should be honest with their credit history and show that their financial situation as, in fact, improved. They will have to work harder then applicants with a bankruptcy on file to prove that they are reliable and responsible.

 

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