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?Foreclosure? is a word that has become part of the vocabulary for many Americans. Regardless of whether you are an investor looking to purchase distressed properties or if you?re a homeowner facing the possibility of losing your home, the word ?foreclosure? is ever-present in the current real estate market.
Looking Back to the Beginning
Before the real estate market crash, many lenders were participating in questionable actions, including providing home loans to individuals with insufficient income. In the end, robo-signing, among other lender practices, led to a complete crash of the real estate market with many homeowners facing foreclosure and underwater mortgages.
Although robo-signing has supposedly ended, many states?especially those with judicial foreclosure processes?still have many homes entering into the foreclosure process.
(On a side note, apparently not everyone learned their lesson when it came to robo-signing as the exact same thing is currently happening in the credit card arena.)
What Happens After Foreclosure
Even with the current real estate market progress, the aftermath of foreclosure is still handled pretty much the same way?with one exception, the option to rent.
If a homeowner loses his or her home to foreclosure, more often than not the individual is evicted and left to find housing elsewhere. However, now many lenders provide an option for foreclosed homeowners to rent their property after the foreclosure process is complete?with Citigroup being the most recent addition to this rapidly expanding group.
Why, exactly, is renting out these foreclosure properties appealing to many lenders?
An Incentive to Rent
With the foreclosure inventory remaining relatively high, lenders are overwhelmed with the properties entering their inventory. Many of these properties are left abandoned and have become the headquarters for drug dealing and vandalism. The most recent craze involves groups of individuals vandalizing abandoned homes with Sharpies.
Therefore, renting these foreclosure properties to the homeowners facing foreclosure not only allows these individuals to stay in their ?homes,? but also protects the lenders from having to deal with the damages often associated with vacant properties.
If you?re an investor or potential homeowners with an interest in obtaining discounted properties, then foreclosure homes are a great option. On the other hand, if you?re an individual facing foreclosure, then know your options (such as renting your home from the bank).
In the end, foreclosures are very much a part of the current real estate market and are more than likely here to stay for a while.
Source: http://www.wannanetwork.com/2012/08/21/lenders-move-to-renting-foreclosure-properties/
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