Homeowners can be devastated by a foreclosure, but renters often have it worse when a property enters foreclosure. The effects go far beyond simply being evicted and many renters have had a tough go of finding adequate housing when the property they rent ends up in the hands of the bank.
Depending on the state of residence, renters could be given less than 30 days notification of an impending foreclosure on their rental property. If a renter lives in a non-judicial foreclosure state, the property could complete the process in 30 days or less, leaving the renter with very little notification of an eviction. In many cases, renters are unaware that their property is at risk of foreclosure as the landlord is not required to disclose this information in any way. Besides being evicted in a matter of days, renters often face additional challenges.
In some foreclosure cases, occupants are given a small relocation allowance to cover moving related expenses. However, this expense coverage or reimbursement is rare and often at the discretion of the bank or landlord. Further, many renters are reporting a surge in rental prices as the result of an influx in demand for rentals in foreclosure saturated areas. In some regions of the country, rental prices have jumped by 10 or more percent simply because the rental market has become so competitive.