We've talked before about the big problem with the eviction moratorium, and it appears now that things are edging closer to a breaking point. I received a call from my ears out in New York State and they put me in touch with someone whose story should, and is going to, scare a lot of people.
This person is a real estate holder who makes his money by renting out properties to people. He is not a corporation, but he does hold a good number of properties, and there is is not a small number of people who depend on him keeping control of his properties for them to remain in their homes.
So that is why this news should be so troubling for them.
The property owner reports that he has formally filed paperwork for bankruptcy, likely chapter 13 (though he did not specify), and that he expects that as part of the debt settlement he will have to sell the properties with all of the proceeds going to the debt holders.
So what? It is just one "fat cat" getting skinned so that low income people can live, right?
Wrong, dead wrong.
You see the moratorium on evictions is just that, it is a moratorium on evictions. That said, if the property changes hands, there is no longer a contract between the renter and the new property owner once the current lease is up. Oh, and by the way, many leases have finished during the last two years and most are on month to month at this point, especially if they were behind in their rent.
So if you do not have a lease, then you do not have a contract, and if the property changes hands, well then, you are no longer protected. Those same renters are now going to be out on their tukises the same as if they were evicted, except now, they took the property owner down along with them.
I said from the start that the government requires the income of funds to the treasury from the loans that they made to banks for mortgages. Those banks are not going to pay those funds, so the mortgage payments by landlords continued. Now the property owners cannot pay the mortgage because the renters have not paid, so the banks are in the process of foreclosing on the homes which means that if the landlords do not seek bankruptcy protection so they can sell, then even the renters who HAVE a lease are going to be kicked out.
Yep, the landlord's filing of bankruptcy will protect a small number of people because he will be allowed to sell the properties instead of them being repossessed by the bank, but for others, that will not happen and EVERYONE living in those complexes will be out so that they can be sold by the bank to recover their money.
In the end, all the eviction moratorium did was kick the can down the road, and in doing so, it wrecked the lives of the property owners along with their renters...
Well maybe not, as the property owner reports that on one of his visits to a particularly rude renter he realized that the renter had purchased a NEW CAR. Maybe the renter can live in it... he might just have to.
I wonder what is going to happen when there are no landlords left...
When all the properties are bought by flippers or AirB&B investors and rental properties are almost non-existent...
What will that do to rent prices...
More importantly, where will people live?
Hope you can get a mortgage and afford to buy it from the flipper.