Low Income Renters: New Victims of Foreclosures

3 September 2008

Author: admin Posted under Foreclosure Crisis

If you thought that the only ones severely affected by the foreclosure crisis are the lenders and distressed homeowners, you are in for another surprise. It would seem that even the low income renter are suffering from the problems brought about by the enduring problem in the housing industry.

Low Income Renters: New Victims of Foreclosures

Many renters are being evicted from the properties they are renting and seeking Section 8 Assistance because the landlords could no longer keep up with their mortgage payments. Some of these landlords were among those subprime borrowers who got approved for loans that they can not afford. With the declining home prices and tightening lending guidelines, refinancing and selling the property is out of the question.

Nationwide, an approximate 2.5 million homeowners will most likely enter one of the stages of foreclosure by the end of this year. Since the start of the mortgage crisis, many lenders have already declared bankruptcy since they could no longer handle the volume of mortgage defaults.

Sadly, many of these homeowners who lost their home to foreclosure are likely to end up renting a place. It becomes a vicious cycle from hereon.

Real estate experts and analysts are quite sure that the market has yet to bottom up especially since a large percentage of mortgages have interest rates which are scheduled to reset by 2009. When this happens, another wave of foreclosures can be expected in the country.

The federal government as well as the state governments should provide assistance to these renters who are now the latest victims of foreclosure. They too should be protected from sudden eviction so that they will have time to look for a new place before the property is repossessed by the banks.

Just like the troubled borrowers, these renters also need help in determining what they should do when their landlords are facing foreclosure.