Renters and Foreclosed Properties!

In the past couple of days, the latest numbers were released concerning forclosures. They are most definitely up over same period last year, but what is alarming is that they are at the highest level since the the Mortagage Banker's Association began keeping records on this subject 29 years ago! Also interesting to note is that the rate of delinquency on mortgage payments has also increased to record highs.

Prime Rate ARM products as well as sub prime ARM products have been the biggest reason for the increase in delinquencies. They account for almost 60% of all new foreclosures reported!

That is indeed bad news for the markets. Let's ad on to that the failure of Fannie Mae and Freddie Mac and then on top of that we will add that another CEO in the Financial arena has been forced out of his position. Washington Mutual's CEO is the latest of the top ranking Banking officials to go. As you may already know, WAMU is notorious for their family of ARM products, many of which are Option ARMs. Need I say more?

But the biggest question is what happens to the person renting a house that enters into foreclosure? Well, let's speculate just a bit! First of all, is the landlord going to tell the renter? Probably not. If the landlord did so, rental payments might stop, the renter might move out and the security deposit will probably be lost too. Although protected in most states, the security deposit would normally be returned, but if the landlord is in the midst of foreclosure problems, good luck!

That is all speculation on my part, but probably pretty close to what would probably happen! My biggest question, though is how does a tenant know if the home they live in is being foreclosed? Well a new program has just been announced by Baird and Warner, a Real Estate Brokerage Firm in Chicago. I hosestly have not visited the site, but from what I have read it works for states other than Illinois. If you are a renter and want to check it out, follow this Link.

For those savvy enough to do public record searches, many states allow Counties within their state to offer such searches Online. And public record searches through the County Clerk's office are FREE. If you are asked to pay a fee, you are probably on a private company's site that offers such a service. Do a search for your County Clerk and once on their web site, look for public/land records searches.