Wednesday, August 22, 2007
Some will find roommates, some will get help from relatives, some will, as I said in my first post on this subject, move to other parts of the country, and some, sadly, will end up homeless. There, they will encounter another probable group of newly emergent homeless people, Iraqi war veterans.
Some displaced homeowners are getting a cool reception as the surge in real estate foreclosures sends them back to the rental market in search of shelter.
Nevel DeHart of First Advantage SafeRent, a national tenant-screening company, warns that homeowners often are deeply in debt by the time a foreclosure occurs. With no financial reserves to fall back on, they sometimes make poor rental risks, he said. “There is just no margin for error.”
Ron Bowdoin, who oversees 2,500 rental units for the SARES-REGIS Group in Los Angeles and the Inland Empire, said foreclosure victims often fail to meet his company's credit standards.
“As they reach the brink of foreclosure, their credit reports have suffered tremendously,” he said. “We have to do a co-signer or large deposits to get them into apartments.”
Smaller, locally owned rental firms generally are more willing to work with people who've had financial problems, he added. Large, corporate-owned complexes, which often have more amenities and higher rental rates, are less flexible.
Furthermore, as my brother-in-law soberly told me yesterday, employment can be conditioned upon a positive credit report. Accordingly, some of the people subject to foreclosure, after burning through all of their other forms of credit, will find themselves experiencing difficulty in the job market.
So, if they lose their current jobs, the future could be grim. Of course, employers are supposed to tell applicants that they have been denied employment because of the adverse content of a credit report, but the requirement appears easy to evade. After all, how is an applicant to know? Probably only after several failed job interviews, and a newly discovered dependence upon meals served by Food Not Bombs.