More New York Apartments Face Foreclosure
In New York City, more and more apartment buildings are at risk of being foreclosed, possibly resulting to thousands of renters being evicted. According to housing advocates, there are roughly 580 apartment buildings facing foreclosure. This means that about 40,000 tenants will be affected.
This particular problem is being seen as the consequence of speculating. In the last four years, private firms have bought 90,000 units in New York at inflated prices, under leveraged deals. The decision of these firms to do so was based on the hope that rent would soar, allowing them to maximize profit.
Just like the speculators in states like California and Nevada, these private firms found themselves with mortgage payments they could not afford. The rental income from these apartment units were simply not enough to pay for their mortgage debt. Unfortunately, they could not raise rent prices since most of their buildings are governed by strict provisions regarding rent increases.
If these distressed properties go into foreclosure, it is not the landlords who will suffer immensely but the tenants. Even if they were paying their rent religiously, it no longer guarantees that they will always have a place they could call home. In a blink of an eye, they might find themselves out on the street without much choice.
To make matters worse for these tenants, finding a new place to lease or rent has increasingly become difficult. This is because those who lost their homes to foreclosure usually end up renting an apartment. In addition, many landlords have decided to require credit reports. For those with low credit scores, this will add to their burden.
Tenants are advised to stay updated with the mortgage situation of their apartment units. It would probably be better if your contract has provisions that deal with this matter. In most states, tenants are given a 90-day notice to move out of the property before being evicted. Also, most of the lenders who repossessed the property agree to the refund of the deposit.