In the state with the largest number of foreclosure, being up to date with your payments does not assure a renter a roof over their head.  If a property that you are paying rent to reside in goes into foreclosure, an eviction notice will most likely be coming your way.  This is because most banks that assume responsibility for a property that have been foreclosed upon are unwilling to also become landlords.

At first glance it seems counterintuitive, why pass on rent checks and occupied properties that lessen the decline of home and neighborhood prices?  The answer is quite simple, the banking industry does not have the infrastructure in place to carry out basic property management.  William Acheson, an analyst at Benchmark Co. was quoted by Bloomberg, “Banks are notoriously bad property managers, if they can sell them at a 60 percent discount, they will.”

With this type of mindset, a renter is far from guaranteed a place to stay when it comes to a foreclosure.  It is believed that up to 1/3 of the 267,000 California foreclosure sales in 2008 were of rental units. This is almost 13 percent higher than the national average of twenty percent.  It is estimate that if the banking industry was willing to rent out these properties they could make more than $1 billion dollars a year.

Fortunately changes are being made to the system.  In January Freddie Mac and Fannie Mae began hiring properties managers to work with renters to find new leases.  With the costs being outweighed by the benefits this trend is sure to follow.