Tenants who have had a foreclosure in their recent past

[SusanPenner]

Good Morning:

Last night I had a family approach me to rent the house I have for rent. Before I mentioned that a credit check would be done, the husband confessed that the bank foreclosed their property because they couldn`t make the 3600/month morgtgage payments. My house rents for 1995/month. Both the husband and wife have been employed in their jobs for multiple years. They seem like "bad thing happen to good people".

Other than going through normal procedures (credit check, checking references, etc), is there anything else that can be done? I was thinking of asking for a letter of employment and I was thinking that instead of personal cheques (in the coming months) that they would be on bank drafts for the next 4 months. (if they prove that the foreclosure is the only negative thing)... (nieve question - can bank drafts be post dated??!!

Any advice would be appreciated!

Thanks in advance

Regards,

Susan

 

[SusanPenner]

QUOTE (SusanPenner @ Sep 26 2008, 07:41 AM) Good Morning:

Last night I had a family approach me to rent the house I have for rent. Before I mentioned that a credit check would be done, the husband confessed that the bank foreclosed their property because they couldn`t make the 3600/month morgtgage payments. My house rents for 1995/month. Both the husband and wife have been employed in their jobs for multiple years. They seem like "bad thing happen to good people".

Other than going through normal procedures (credit check, checking references, etc), is there anything else that can be done? I was thinking of asking for a letter of employment and I was thinking that instead of personal cheques (in the coming months) that they would be on bank drafts for the next 4 months. (if they prove that the foreclosure is the only negative thing)... (nieve question - can bank drafts be post dated??!!

Any advice would be appreciated!

Thanks in advance

Regards,

Susan




PS: Forgot to mention they will have 100K in the bank from the sale of their house and they want to rent for awhile just to "get their life back together". Can I ask for a bank statement to confirm the 100K?

 

[RedlineBrett]

Yes you can ask for a bank statement - just ask them to print off their online summary and make sure that the account numbers match up with the cheques they`ve shown you.

The big thing you want to know is what has changed in their situation. They couldn`t pay then - what has happened in their world to change that?

If the answer is nothing and the only improvement is that the house is going to be 1600-1800/mo cheaper I would be a bit leary.


QUOTE (SusanPenner @ Sep 26 2008, 07:43 AM) PS: Forgot to mention they will have 100K in the bank from the sale of their house and they want to rent for awhile just to "get their life back together". Can I ask for a bank statement to confirm the 100K?

 

[RebeccaBryan]

If the bank forclosed thier property, how could they have a 100K from the sale of it?

 

[RedlineBrett]

In Alberta, when homeowners lose their property to foreclosure the law dictates that the bank must sell it for as close to market value as is possible. Legal fees, arrears are paid out and then each lien holder is paid out according to their order on title. Whatever equity is left over is given back to the owner.

A judge has to approve the offer before a judicial sale order is issued giving the bank permission to sell the property. If they think the homeowner is getting a bad deal they won`t approve the sale and will tell the law firm representing the bank to do a better job of marketing the property.

This is very different from policies in the states or Ontario, and is why people seldom get properties for 10% or more off market value through the foreclosure system. All the money is in finding the homeowner first and doing a deal with them privately.

QUOTE (RebeccaBryan @ Sep 26 2008, 11:04 AM) If the bank forclosed thier property, how could they have a 100K from the sale of it?

 

[invst4profit]

I would be very suspicious of these individuals. Why would they fall behind in payments and lose the house with that much into it rather than sell it themselves. You need to dig much deeper. Bad things happen to stupid people.

Something fishy here.

 

[wealthyboomer]

-Pull the Title on their house to see if they are/were indeed the owners.
-Since they will be having $100K in the bank, ask for 3-6 months advance rent.
-Call their employers to check employment status.
-Search the internet with their names to see what you find.

 

[SusanPenner]

As it happened, I had some userid issues with Rentcheck today so I couldn`t pull their credit ratings. Their employment calls checked out, but I told them this afternoon that we would have to have a frank conversation of how they where foreclosed on with their salaries (household income of 90k...at least that`s what they said..hmm)

Tonight I had a phone call saying they had another house lined up...but thanks for my time!

Thank you for YOUR time advice....much appreciated!