A 2011 research paper by the Federal Reserve Board, “The Post-Foreclosure Experience of U.S. Households,” used credit reports from more than 37 million individuals between 1999 and 2010 to measure post-foreclosure behavior, especially in regard to future borrowing and housing consumption. The study found that: 1) On average 23% of people experiencing foreclosure had moved within a year of the foreclosure process starting. In the same time, a control group (not facing foreclosure) had only a 12% migration rate; 2) Only 30% of post-foreclosure borrowers moved to neighborhoods with median income at least 25% lower than their previous neighborhood; 3) The majority of post-foreclosure migrants do not end up in substantially less-desirable neighborhoods or more crowded living conditions; 4) There was no significant difference in household size between the post-foreclosure and control groups. However, only 17% of the post-foreclosure individuals had the same number and composition of household members after a foreclosure than before. By comparison, the control group maintained the same household companions in 46% of cases; and, 5) Only about 20% of post-foreclosure individuals chose to live in households where one person maintained a mortgage. Overall, the authors conclude that it is “difficult to say whether this small effect is because the shock that leads to foreclosure is not long-lasting, because the credit constraints imposed by having a foreclosure on one’s credit report are not large, or because housing services are more inelastic than other forms of consumption."[28]
Rent to own housing is a popular choice for home buyers who may not qualify for a traditional mortgage, or lack the funds needed for a large down payment the lenders require. Rent to own properties help to overcome these situations for those who are ready to commit to a purchase. Buying a rent to own home can provide an easier approach to purchasing a home because it starts with a familiar lease agreement. Buyers of rent to own homes will rent, or lease, the home for a designated period of time. The great benefit for renter-buyers is that over time, a portion of the monthly rent payments are applied toward the ultimate purchase of the home. Plus, the final purchase price is determined up front in a lease option agreement, so there is no risk that the purchase price will rise later.

"Strict foreclosure" available in some states is an equitable right of the foreclosure sale purchaser. The purchaser must petition a court for a decree that cancels any junior lien holder's rights to the senior debt. If the junior lien holder fails to object within the judicially established time frame, his lien is canceled and the purchaser's title is cleared. This effect is the same as the strict foreclosure that occurred in English common law of equity as a response to the development of the equity of redemption.
When the entity (in the US, typically a county sheriff or designee) auctions a foreclosed property the noteholder may set the starting price as the remaining balance on the mortgage loan. However, there are a number of issues that affect how pricing for properties is considered, including bankruptcy rulings. In a weak market, the foreclosing party may set the starting price at a lower amount if it believes the real estate securing the loan is worth less than the remaining principal of the loan. Time from notice of foreclosures to actual property sales depends on many factors, such as the method of foreclosure (judicial or non-judicial).

Rent to own situations can be structured in two popular ways. One is the lease purchase. A lease purchase usually requires the tenant to commit to buy the home over an agreed to period of time. Terms can be quite flexible to suit the renter's needs. These terms include the time frame, the amount of rent applied to the rent to own purchase, and the price of the property. The second approach is called a lease option. In a lease option, many of the same terms apply as in a lease purchase. The difference is in the lease option, the tenant may not be required to purchase the home at the end of the option time period. However, in each case, the renter usually needs to put up a non-refundable option fee to initiate the rent to own contract.
It’s critical to sign an agreement that is in your best short- and long-term interests. The rent-to-own option will cost more than a traditional home rental because there are other costs baked into the monthly amount. The good news is these “other costs” such as the initial option fee and monthly credit will go toward the final purchase price. Nevertheless, a rent-to-own contract should always include the length of the rent-to-own lease agreement (usually anywhere from 12­ to 70 months), the amount of initial option fee (usually 35 percent of final purchase price), the final purchase price at the end of the term, and the amount of the monthly payments that will go toward the purchase price. These figures are all negotiable.
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