A new survey of former homeowners who have walked away from their homes found that their credit was good enough after foreclosure for the vast majority to rent new housing and few were required to make a larger than normal deposit.
YouWalkAway.com, which counsels troubled buyers to strategically default, found that owners and managers of rental properties regard the influx of renters in the market due to the housing market meltdown as a boon, and many are willing to accept potential renters even if they do not have credit scores as high as landlords previously would have required.
Some 81 percent of foreclosed owners were able to rent and 8 percent were even able to buy a new property despite their credit history. Only 13 percent experienced problems renting and 18 percent said they had to put down a larger than normal deposit in order to get a lease. Most were living in smaller quarters than when they were homeowners.
“Rental applicants with a foreclosure are now accepted with the proper documentation,” says Tony A. Drost, president of the National Association of Property Managers and owner of First Rate Property Management in Boise, Idaho. “In fact, a former homeowner with a foreclosure is one of the best tenants. They know how to keep up and care for the home since they have previously cared for one.”
John Bradford, owner of Park Avenue Properties in North Carolina, says, “We are seeing a slight increase in applicants with foreclosures, and our owners are typically open to renting to those applicants. Poor credit, caused by a foreclosure, has very little to do with having overall good citizenship, and if the other credit history is reasonable outside the foreclosure, then the applicant should be considered, possibly with other requirements like an additional month’s deposit. In the end, a credit score is just one factor in a balanced score card approach.”
Most of the former owners would like to become homeowners again, despite their experiences. Some 56 percent said they would buy a house again, 38 percent within the next five years. By renting, 58 percent said they are saving 30 percent or more in housing costs.
For more information, visit www.realestateeconomywatch.com.