The tentacles of foreclosure reach out to renters too.
The National Multi-Housing Council, a trade association for the nation’s biggest apartment landlords, usually can be found taking aim against the entrenched notion that every American ought to own a home, not rent one.
Now it’s also waging battle with the “shadow market” of investors and other homeowners who can’t sell their properties, so they’re renting them out. Watch out, the council warns, in case that landlord gets into financial trouble and you find yourself residing in a foreclosure.
The trade group has produced a brochure that its members can offer would-be tenants, warning that nearly 40 percent of all foreclosures involve houses or condos that have been rented out by their owners, a statistic from RealtyTrac, a foreclosure-data firm. The landlords’ group warns that a tenant’s security deposit might be at risk in the tumult, not to mention the possibility of being forced to move on short notice.
At about the same time, Chicago’s Baird & Warner Real Estate has added a feature to its Web site, BairdWarner.com, that allows renters to search a database that promises to tell them whether their landlords are in foreclosure.
The Lawyers’ Committee for Better Housing estimates that 2,500 families who rent in Chicago will be displaced by a landlord’s foreclosure this year.
But a new law does give them some protections, according to Kathleen K. Clark, the group’s executive director.
“If the tenant wasn’t named as part of the foreclosure filing and is being taken into eviction court, they must be given 90 days notice,” she said. “It’s not a tremendous help, but it does give them a little bit of time.”
It also provides that court records for a tenant who is evicted because of a landlord’s foreclosure be sealed, except to law enforcement and government entities, she said.
However, the 90-day notice applies only to tenants who are current in their rent payments or have made good-faith efforts to pay, she said.
Tip o’ the glass
This week’s award for most creative incentive offered to entice a buyer: If you buy house that’s on the market in Evanston, you can kick back on move-in day and have a rather nice bottle of wine — or two or three. The seller of the house, a wine auctioneer, has decided to throw about $12,000 of the beverage into the deal.
“Somebody always jokes when you have a wine cellar, if you sell the house does the wine come with it,” said the homeowner, Paul Hart, CEO of Hart Davis Hart Wine Co. in Chicago. “I got to thinking about it and said, ‘Yeah, I’ll leave it.'”
The 200-plus bottles from his personal collection are mostly from California and France. “It’s a nice starter collection,” Hart said.
But it’s not a starter house: The landmark home, in the Ridge Historic District in Evanston, has 16 rooms and is listed for $1.8 million through Koenig & Strey GMAC agent James Konold.
Subprime shrinkage
Not so long ago, just about anybody with a pulse could get a mortgage — and did, which is one of the reasons we’re in this mess today.
So, of necessity, lenders have tightened up, and mortgage reps tell me that getting a loan approved can be tough sledding. The federal government recently quantified the situation: It sifted through 21 million mortgage applications and reported that about one-third were denied last year. The main reason was the applicants’ credit history, the Federal Reserve reported.
And proof that subprime lending to borrowers with damaged credit has become comparatively extinct: In the first half of 2007, lenders handed out $148 billion of those mortgages; that slid to $34 billion in the second half. In the first six months of 2008, $1 billion in subprime loans were originated.
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Hear Mary Umberger at 12:49 and 11:15 p.m. Tuesday and Thursday and at 10:30 a.m. Saturday and Sunday on WGN-AM 720. Write to her at Real Estate, Chicago Tribune, 435 N. Michigan Ave., 4th Floor, Chicago, IL 60611 or send e-mail to housing news@comcast.net.
