Here's a question that bothers me. Let's say that a family borrowed [too much] money. Due to job problems or some such, they run out of money, default on the mortgage, get foreclosed and kicked out. Where can they go? What if they do not have money for rent (due to the above)? What about their credit? I thought that landlords check tenants' credit and would not let to people with bad credit? So what happens then?
i
If they are quick they rent a place before their bad credit gets on the report. Or...Homeless shelters? Their car?
Their family (extended). Section 8 housing? They could join the Army. Or, they could scrape together a few bucks, head to Reno, and try their crapshoot all over again.
There was a very similar housing debacle in Britain in, let's see ....
1988 ? 89?, when loads of young couples had been tempted to go out and sign up for a mortgage on a house much bigger than they needed. House prices had been inflating to ridiculous levels for some time. Then came the overnight collapse of the housing market, I mean it took place amazingly fast, and they were suddenly saddled with negative equity, and unemployment hit a lot of them too, so all in all, lo and behold, masses of homeless young couples, many with children, all over the place looking for a home. The government was forced to open up big hostels and shelters, depressing places but at least you had a roof over your head. Me, I'd since 1970 been in the business of letting flatlets, bedsits, that is, a room and kitchen in big old houses I'd split up for multi-occupancy.The city in England I was in then, there was a large demand for such accommodation so I did OK. But I'd sold out in about 1979 and when this big crash came along, I'd wangled a council apartment, i.e. public housing, and being disabled by then, was paying no rent or domestic tax! You may imagine me back then sitting with my feet up, drinking Scotch and listening to all this doom and gloom on the radio and laughing my head off! And I *think* I am well buffered against this present catastrophe, because I only had about one third or less of my capital in the stock market, and that was converted to Treasury bonds temporarily when I dumped the Edward Jones outfit and gave my business to the investment department of a local bank, Frost's Bank, in about early September. These bonds are safe as houses, err, no, can't say that, well, safe as the Bank of England! But they only paid me a measly 80 dollars for a month.... So I am now having Frost's put the Treasury bonds money into municipal bonds , and Texas school bonds and suchlike; as far as I know these are pretty secure against the wild swings of the market we are seeing these days. This (new-built) house is bought and paid for, I have no debts of any kind, a government pension coming in monthly from Britain, it's an old age pension: I reckon I'm fairly comfortable compared to many.-- Ian Ft Worth, TX
There are always rental units available for people have a little money to spend on rent, but not enough to keep up home ownership or to pass the credit checks. Of course, those units might be rat-infested hovels in the worst part of the city, And they are probably overpriced even for their poor condition.
I read in the local paper today about 93% find rentals and 7% go on streets (for our state).
A fair number of people are walking away because their house is under water. Not because they cannot afford it.
They learn that they shoudn't have done that. In today's markets everyone is selling a monthly payment. Just look at the ads. New Cadillac CTX for only $399/month. How much is that house going to cost me? Well, $2,500/month, how much do you earn? $1,800/month but who needs food and utilities. You qualify. Sign here.
If they're bankrupt and unable to pay market rents, they can live in Section 8 rental housing, qualify for food stamps, etc.
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