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Foreclosure of Apartments Troubles Blameless Tenants

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By : Leticia Carvalho    99 or more times read
Before the real estate industry entered the period of foreclosure crisis, during the time when it was in a very flourishing condition, houses were high-priced, even plain, old-fashioned apartments.

Investors feasted over apartment buildings in high hopes that they could bring in well-off tenants to the properties and eventually turn them into a rather profitable investment.

Unfortunately for the investors, circumstances turned otherwise. Local laws regarding rent stabilization controlled the market. Companies could not freely turn over as much apartment units as they pleased to tenants who can afford market rates.

Revenue has not turned out as expected. Investors who shelled out millions in acquiring the rent-regulated properties have gone into foreclosure troubles and other financial problems.

Building operating costs have been bigger than expected. Owners are struggling with high mortgage payments. A rough estimate of 60,000 properties is expected to be subjected to foreclosure.

The repercussions of the situation would be most felt by tenants. To prevent foreclosure, landlords might resolve to cutting costs at the expense of house maintenance. Much worse, some may harass tenants to have them move out from the rent-regulated apartments.

The situation is not far from the crisis that the whole US housing industry is undergoing right now. Investors are threatened by foreclosure because they fail to anticipate the big costs that come with their properties. Only, this time, blameless people could suffer.

Innocent tenants could fall victim. The turnout of events could eventually mean the eviction of these people. Regardless of whether they diligently pay their dues, once the apartments are foreclosed, they will be forced out just the same.

U.S. Senator Charles Schumer proposed that new regulations be implemented to address this dilemma. In addition, proper investigation should be undertaken, according to the Senator. These tenants deserve to be spared from foreclosure problems that are consequences of decisions they did not make.
Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.

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