An Ol' Broad's Ramblings
Question
We were watching the local new tonight, and the infobabe started talking about the housing situation in Memphis. According to what was in the report, 20% of all home foreclosures are on rental houses. Now, I’ve never owned a house that was rented out, but it’s my understanding that if you buy a house, and rent it out, don’t you normally use the rental payments to pay the mortgage? I would think if your mortgage payment was, say $300, you’d rent the house out for $400, or $500. That way, you have a little left over for repairs if needed, or to sock away for a raining day. But you pay the mortgage payment. If push comes to shove, you might have to live in that house one of these days. Wouldn’t it make sense to keep up with the payments?
This just got my curiosity going. Anyone have any answers?
Well, that would make sense if you have a responsible homeowner/landlord. Now, if you have an irresponsible homeowner/landlord, who knows where those rental payments end up…perhaps HIS mortgage, credit card debt? That’s why so many renters are getting screwed. They pay their rent, but the owners don’t pay the mortgage.
I think the landlords should be flogged. Publicly.
No doubt, there were some who got themselves in a mess. But if they had any decency, they would have gone to the renters and told them what was going on, not leave ‘em hanging. Do we have no sense of decency anymore?
Oh my dear, if they had any decency, they probably wouldn’t be in that position. That’s the problem these days…folks just don’t have common decency. I’ve seen and read far too many stories about renters who have no idea that the house is in foreclosure, since the landlord is not required (??) to tell them, and they end up out in the street. The laws have to change. IMHO, if a rental house is in foreclosure, the lender should be required to inform the renter.
Ok, I know….I’m asking way too much. sigh… Do lenders even know whether or not that house is being bought as a rental? Is there something in the papers that states the purpose of the house? I could probably dig out our stuff, and see if it’s in there, but I think they’re in the ‘vault’.
Again, olbroad – if the buyers/owners are HONEST with the lender, then the lender will know that it is not going to be the primary residence. That usually gives the lender a bit of a heads-up, but again, it depends on the buyers being HONEST.
I guest ‘honest’ has turned into a four lettered word these days.
Or maybe due to the poor economy, it’s hard to find people to rent a house. Houses empty= not enough money to make the mortgage payments.
cristina, these are people who are being kicked out of their rental houses. I don’t think they’re having a problem finding folks to rent. At least not in Memphis.
I understood that 20% of all home foreclosures are on rental houses. I thought the foreclosure refers to the owners of the houses (not paying the mortgage), not the renters. Oh, well…
Exactly. And when the owner is foreclosed on, the renter gets kicked to the curb, whether or not they’ve made timely rental payments. It’s really quite simple: Renter pays rent to owner. Owner fails to pay the mortgage on the property. Bank forecloses and renter is out of luck.