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wundayatta's avatar

Where do the people go when they lose their homes due to foreclosure?

Asked by wundayatta (58525points) August 17th, 2011

Foreclosures are happening all too frequently these days. Where do people who have lost their homes go?

The obvious answer is that they rent somewhere, but I don’t know if this is true. Do they end up without shelter? Do they go to relatives? Find public housing? What happens to people who have lost their homes? If anyone can find a little data about this, that would help.

If you’ve ever been in this situation, what did you do? If you know someone in this situation, what did they do?

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18 Answers

Jude's avatar

My g/f’s Uncle just lost his home on the lake due to foreclosure. He owns a printing business and because of the economy, he wasn’t able to afford his home. Now, he’s living in a double-wide.

zenvelo's avatar

I think it’s all of the above on your list. It depends on what occurred to put them into foreclosure. Lose a job? Business failure? Out of money? They may end up homeless or moved in with relatives.

House just got too expensive because of balloon payment or adjusted mortgage ratcheted up? Then you may be in more control and be able to rent a place.

I have not heard of any studies on what happens to foreclosed families.

Aethelwine's avatar

We lost our home this time last year. We happened to find a rental that was just perfect for our family and within our price range about a month before we were due to receive our eviction notice. We had to move an hour away from where we were living to find something affordable.

Randy's avatar

My parents lost our house when I was about 12. They found a rent house about 30 minutes away for super cheap. We had to get a cat to keep the mice away.

Adirondackwannabe's avatar

My first 12 years of work were in banking. Some people moved to rentals, some couch surf, some live in their vehicles.

crisw's avatar

Two of my sisters lost their homes to foreclosure, and we had to go through a short sale/deed in lieu to get rid of our house. We all rent. My husband and I plan to buy again in a year or two, after we get established after our move to Portland, but my sisters have no intention of buying again.

choreplay's avatar

Not sure I have hard evidence to answer you question but the apartment industry is in a stage of growth. I assume due to foreclosures and the large number of people no longer credit worthy that were before.

jaytkay's avatar

I work on mortgage & property tax issues, and I have to find people who may have sold the properties 5 or 10 years ago. A huge number of them lost their places to foreclosure, I was shocked how common this is nowadays.

If we can find them, usually they are renting or living with relatives. Sometimes immigrants return to their home countries. We have found people as far away as Poland and Ireland.

wundayatta's avatar

Thank you, @bkcunningham, for that link. The key paragraph in that study says,

Analysis of the first question revealed that staying with family or friends and emergency shelters were the most common post-foreclosure living situations, followed by hotels/motels, then transitional or permanent housing.

One thing that surprises me is that rent is significantly cheaper than housing. Or maybe people don’t transfer to comparable apartments, but move to places that are not as nice as their home.

incendiary_dan's avatar

Sometimes they make neat tent villages.

SpatzieLover's avatar

They rent apartments if they still have jobs. If they don’t, they either move in with family or live in their car or a shelter.

Neizvestnaya's avatar

Everyone I know in this situation (lots) has gone on to rent or combine households with family. In my fiancee’s old apt. complex there were dozens of families who had been displaced.

In our case, my mother lost her home and teamed up with us to rent a house until she can retire and then go rent by herself again. It’ll be another year before she can be independent again.

Apartments and property mgt. companies even advertise that BK, foreclosures and tanked credit aren’t an issue against renting so much because there are so many people like that in need of homes.

SpatzieLover's avatar

Apartments and property mgt. companies even advertise that BK, foreclosures and tanked credit aren’t an issue against renting so much because there are so many people like that in need of homes.
Yes, we have changed our approval policies due to the high volume of credit issues people now have, we accept them as long as they can prove they paid their utilities and have income that will cover rent & utilities.

Neizvestnaya's avatar

@SpatzieLover: Yes, our incomes and more importantly, our cash up front for huge deposits is what saved us. This is a good time for property mgt., I think. They can demand and get bigger rents, deposits and fees up front because they know people are coming out of houses, aren’t familiar with the rental market prices and have cash that’s not going to mortgages anymore.

YARNLADY's avatar

I just heard on the news it is now cheaper to buy a house in our area than it is to rent.

The real catch is that if you have lost your house to foreclosure, you can’t buy another one.

The crazy thing is, if you lost your house because the mortgage was higher than the loan, the next guy can buy it for less than you ever owed on it. None of this makes any sense to me. The lender would be better off simply lowering the loan they gave you in the first place.

filmfann's avatar

My friend Craig found an apartment.
My friend Rob found an apartment. He has since bought another house.
My friend Greg moved home with his folks. He has since bought another house.

These are scary times.
Should it ever happen to me, I will buy a motor home.

YARNLADY's avatar

The several unemployed people in my extended family are all living with other people. I got real tired of having one certain person living in my house, so we bought a rental house, and now my son, his two children, wife, her mother and grandmother all live there.

The original plan was he would make the mortgage payments, which he does when he has a job, but has been unemployed more than employed the past four years. The two elderly women pay a small rent out of their SS benefits.

Two of my adult grandsons are living with me, (plus one girlfriend) and one is living with his partner, and when his mother lost her job, she moved in with them.

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