Bruised Battered and beaten

[Glenn]

I thought you folks might like to read this article I have been sent

<DIV>

This month's column sponsored by rentalads.com. More at the end.

Bruised, Battered and Beaten

<FONT face=Arial><EM>By Robert L. Cain, Copyright 2007 Cain Publications, Inc.

[BusyLizzy]

Hey Glenn - where's the article?

[Keys]

I thought you folks might like to read this article I have been sent


<DIV>

This month's column sponsored by rentalads.com. More at the end.

Bruised, Battered and Beaten

<FONT face=Arial><EM>By Robert L. Cain, Copyright 2007 Cain Publications, Inc.

Yes please Glenn.

[Glenn]

Goodness. I am sure it was there.
I will give it another try. got it fugured. this site did not like the font.

Bruised, Battered and Beaten

By Robert L. Cain, Copyright 2007 Cain Publications, Inc.
As people come back to us bruised, battered and beaten by the subprime mortgage disaster, we have to look at some issues these prospective tenants have--issues that did not exist before they left us and became homeowners.

Certainly we welcome them back, but we owe it to ourselves to be careful with our welcome mat. Their problems may not be over. Often the mortgage wasn't the only thing that went unpaid. Even the
Here are three things that we owe it to ourselves to be aware of when renting to people who have lost their homes to foreclosure.

Dinged credit
"Risks associated with foreclosure are not limited to the foreclosure itself," points out Nevel DeHart, Executive Vice President of First Advantage SafeRent. "The overall risk picture needs to factor in the risks associated with the negative financial events leading to foreclosure (the preceding dominos), and the impact those events will have on the ability to meet rental financial obligations moving forward."
Among those "preceding dominos" is a greater likelihood that your applicant will difficulty paying the rent. DeHart reports that "applicants with a real estate foreclosure average a 24 percent lower score than the median apartment applicant." That is because as they were trying to save their homes, they may have let other bills slide. Those bills are still owing and could result in a collection. A collection could result in a judgment, which could result in a garnishment, which could result in you not getting any rent because there is no money left to pay it.
Then there is the IRS. When the bank foreclosed on the property, it filed with the IRS a 1099c, "Cancellation of Debt." The amount of the debt canceled is to be listed as "Other Income" on the former homeowner's tax return. So if the mortgage debt canceled was $200,000 and the former homeowner was in the 10 percent tax bracket, that is a potential tax bill of $20,000.

Resentment
The Las Vegas Review-Journal ran an article on Nov. 4, 2007 entitled "Home Sour Home." It discusses the fact that the "housing crisis leads some former owners to take [their] anger out on [the] property." The article said "as many as 25 percent of Las Vegas' bank-foreclosed homes suffer intentional damage." The damage "typically requires $3,000 to $10,000 to repair." Other parts of the country can expect similar figures.
Count on some former owners to carrying that resentment over to their new, landlord-owned homes. You see, we kept our properties and a warped sense of justice could create resentment of us because they lost theirs.
Swiss Cheese
The months leading up to the foreclosure have meant an overload of stress for these former homeowners. An article in the Journal of Neuroscience reported "Sustained exposure to . . . adrenal hormones secreted during stress can cause neural degeneration in the rat." Similar brain damage was found in monkeys who had been placed under constant stress. To us laymen, translate that as "Swiss Cheese Brain." Symptoms are such things as memory loss and the inability to learn, because prolonged stress actually kills brain cells, effectively creating holes in a brain where living brain cells used to be. It can take months of low stress for the brain to return to normal functioning. Those would be the months after our new tenant with the stressed brain has moved into our property.
That, of course, is assuming that the scraps, shreds and dust of a damaged cre/dit history don't recongeal for more stress.
Yes, welcome back as customers the people who have lost their homes to foreclosure. We need to show empathy. We need to make their new homes as pleasant and stress free as possible. But most of all, we need to make sure that they pay the rent and take good care of their new homes while they get their lives back.

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