RISMEDIA, June 2 2011—DepositGuard concludes two years of research and development with the launch of its web-based escrow service at the National Association of REALTORS® Mid Year Expo in Washington D.C. The same protection that buyers and sellers of real estate have benefited from for decades is now available to tenants and landlords in a simple-to-use format, the company reports. According to the company, in less time than it takes to make an online airline reservation, you are able to open and fund an escrow account.
By conservative estimates, one in five of the currently 1.8M foreclosed properties in the U.S. is a tenant-occupied, rental home. This translates to approximately 360,000 families that are being pulled into the foreclosure crises right now not because they failed to make their monthly payment, but because their landlord did. Unfortunately, most of these families will be displaced and with many experts predicting a new wave of foreclosures on the horizon, this problem is here to stay.
For tenants to secure a lease, they must entrust money to the landlord in the form of security deposits, pet deposits, and last month rental payments. This raises the question, what happens to this money when the landlord is struggling to make their mortgage payments? Most likely, it is long gone. Of course, the vast majority of landlords are ethical and honest business owners, but desperate times can push good people to make bad decisions—in this case to spend their tenant’s money to try to keep their head above water.
According to the company, tenants who use DepositGuard have full transparency into the escrow account where their security deposit, pet deposit and last month’s rent are held. They are able to log on and check their account balance at anytime giving them peace of mind knowing their money is safe and protected. Additionally the tenant earns the interest on their money.
REALTORS® and property managers who are involved in these rental transactions that become foreclosures, have their reputations (on and off the social web) at stake as well as the risk that a disgruntled tenant may pull them into a lawsuit. This is not the type of relationship they hope to establish with a possible future home buyer in the case of a REALTOR®, or with a current customer in the case of the property manager. If there is a foreclosure, the tenants are grateful the REALTOR® or manager advised them to use a web-based escrow service.