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Federal National Mortgage Association Foreclosures Hurt Businesses

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By : John Cutts    99 or more times read
The rise in the number of bank foreclosures and Federal National Mortgage Association foreclosures in Myrtle Beach, South Carolina, has not just affected homeowners, but also local small businesses. Most of them are concerned about the impact of commercial foreclosures on their operations.

The number of foreclosed homes in Myrtle Beach has shown some increases, and so have commercial foreclosures. In Horry County, almost 300 commercial properties have received a foreclosure filing since 2009, with around 80 properties already owned by banks. The rising number of commercial premises falling into trouble has worried some small businesses in the area that have spaces in these distressed buildings.

However, unlike people who live in foreclosed homes in South Carolina, some businesses are not affected by a foreclosure or a change in ownership; but because this is not always the case, local firms are concerned about the extent of commercial property foreclosures' impact on their businesses. One example is the case of American Athletic Club Center.

The center is set to join other bank and Federal National Mortgage Association foreclosures in the March auction block and some of the property's tenants are concerned that the new owner will not allow them to continue occupying their units in the building. The building is home to a gym, a chiropractor's operation, a pizza eatery, a pilates studio and a tanning salon. The owner of the building was reportedly unable to meet loan obligations due to the loss of several tenants which had closed their businesses.

In most cases, lawyers stated that commercial property tenants have more protection against foreclosures than residents of house foreclosures for sale. Tenants of commercial buildings often have provisions in their lease agreements with banks, which prevent them from getting evicted if the original owner gets foreclosed on and a new one comes in. However, the absence of such provision can mean that a new owner can turn away old tenants upon completion of the ownership change.

The rising number of Federal National Mortgage Association foreclosures and bank owned properties in the city has caused some business owners to worry about the future. According to them, it is hard to move to another building, particularly if they had already built a client base in their current locations.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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