TOPIC: Re:Applicant Rental History Verification

Re:Applicant Rental History Verification 11 years 5 months ago #3707

I agree with you, D. My application and rental criteria do not state a timeline or sunset, the questions are "have you ever been evicted from a rental property?" , "have you ever filed for bankruptcy?" and "have you ever been foreclosed upon?", with some people adding repossessions to the list.

Re:Applicant Rental History Verification 11 years 5 months ago #3710

Ok let's use this real example. I can't attach, so I will describe results generated by On-Site.



Monthly combined application income to rent ration exceeds 2.5 PASS

Gross monthly infome after rent and estimated debt exceeds 25% of monthly income FAIL

Maximum percentage of past due negative accounts is less than 25% NO CREDIT

Unpaid collections and grossly delinquent past due balances do not exceed $1000 PASS

May have been through a bankruptcy PASS

Has not had an eviction lawsuit or landlord collection filed PASS


Let's say this person PASSES all criteria ( I know the results show a FAIL on Income after rent and other debts, but this has been recalculated and passes). This person has NO credit (I understand that NO credit or Limited credit history is better than BAD credit in this case).

This is a person who DID have an eviction filed in 2002, and has told you as much; but has proven the judgement has been paid and has learned his lesson.


Would you approve this applicant?
Last edit: by Johnny Karnofsky.

Re:Applicant Rental History Verification 11 years 5 months ago #3711

Hi Johnny and Chris,

I've been following this thread for the past few days and finally decided to jump in. I agree with both of you on certain items.

Chris, we do need to hold people accountable for the contracts they sign, whether it is a mortgage or a lease. If we didn't where would we be in our business. However; that being said I feel sometimes we need to look at the bigger picture. People do make one time mistakes and do learn their lessons.

Like Johnny, we use On-Site for our credit checking service. Anyone who uses this service knows it does much more for our industry than just check credit. Because you can tailor the "check points" to your companies criteria and your current market, you end up with a system that allows you to accept the most applicants at any given time by varying the risk your company is willing to accept.

I am the Director of Property Management for my company so I get to set these rules. I have set On-Site to automatically decline evictions and foreclosures. This doesn't mean I don't accept some of the individuals in these categories. It just means those folks will need to go through stricter screening.

We operate in California, which has some of the highest cost of housing in the US and the highest (or close to it) rate of foreclosures. When an application comes in that shows the prospects are losing their home, it lands on my desk. I review each file to see the overall use of credit and if these prospects have "refi'd" their home in the past. The refi part is really important to me.

I have seen many prospects who have done "serial" refi's over the past decade, each time taking out a higher loan amount. I don't know what they did with the cash, but now they are in a loan they can't pay and are losing the house. These folks generally don't get approved.

If on the other hand the prospects bought the house within the last 5 years and the loan has now "reset" to a point that they can't pay sometimes due to a loss of job or set back in their economy. If all their other credit is being maintained, I do accept them. All of this needs to be documented very closely, which is why all these files come to me.

Even though we use On-Site all prospects still go through rigorous background checking, previous housing, employment, etc. A bad landlord reference (and this can include late pays, noise violations, etc., up to an eviction) will generally be denied.

Sorry for being so long...Hope I added some value here.

Re:Applicant Rental History Verification 11 years 5 months ago #3712

Vickie DeSofi wrote:

Hi Johnny and Chris,


If on the other hand the prospects bought the house within the last 5 years and the loan has now "reset" to a point that they can't pay sometimes due to a loss of job or set back in their economy. If all their other credit is being maintained, I do accept them. All of this needs to be documented very closely, which is why all these files come to me.


What company do you work for and do you have properties in the Elk Grove area?

Let's talk about an example from earlier in the thread:

Appplicant has been in their current home for more than 15 years, and the lender has 'adjusted' the mortgage payment so much it is nearly 4 TIMES the original payment, and they are walking away for that AND other reasons. This decision was not reached lightly. As a result, the applicant intends to file bankruptcy; but will have enough income to meet their obligation to YOU AND satisfy certain debts that will be excluded from the BK filing (these will be vehicle payments and medical expenses; and are NOT delinquent currently), as well as ongoing utility costs. Forget about the fact that this income is SSI and Disability (the source cannot be considered beyond the fact that it is verified). Prior to this home, they were in their previous home for more than 15 years as well.

I cannot attach the On site results here, so I will describe below; but they have been honest with your staff and told you everything that is going on. After the bankruptcy is filed, the only outstanding debts, outside of the vehicle payments; are medical expenses and these will be excluded from the filing.



Household member 1:

Monthly combined application income to rent ration exceeds 2.5 PASS

Gross monthly infome after rent and estimated debt exceeds 25% of monthly income FAIL

Maximum percentage of past due negative accounts is less than 25% FAIL

Unpaid collections and grossly delinquent past due balances do not exceed $1000 FAIL

May have been through a bankruptcy PASS

Has not had an eviction lawsuit or landlord collection filed PASS

Household member 2:

Monthly combined application income to rent ration exceeds 2.5 PASS

Gross monthly infome after rent and estimated debt exceeds 25% of monthly income PASS

Maximum percentage of past due negative accounts is less than 25% PASS

Unpaid collections and grossly delinquent past due balances do not exceed $1000 FAIL

May have been through a bankruptcy PASS

Has not had an eviction lawsuit or landlord collection filed PASS

Household member 3:

Monthly combined application income to rent ration exceeds 2.5 PASS

Gross monthly infome after rent and estimated debt exceeds 25% of monthly income FAIL

Maximum percentage of past due negative accounts is less than 25% NO CREDIT

Unpaid collections and grossly delinquent past due balances do not exceed $1000 PASS

May have been through a bankruptcy PASS

Has not had an eviction lawsuit or landlord collection filed PASS



Would you approve this applicant?
Last edit: by Johnny Karnofsky.

Re:Applicant Rental History Verification 11 years 5 months ago #3713

We probably would not approve them. You cannot weigh an individuals personal story when you decide to approve or decline applications. You have to weight them on some form of company set criteria and be consistent. They are clearly in a credit crisis.

If you step back and look at the whole picture (and namely this thread) the underlying theme I think is the debate between relying solely on online credit screening, doing the research yourself or a hybrid. Do you want FAST results and if so how much data are you willing forgo for that ability? I know the online screening service provide a good service but it cannot be better than an individual doing the tough work. Some companies do not have the expertise or ability to hire and train a credit department. The online services can relieve you of that responsibility. Our applications do have a 2 day average wait period. (Mainly it's waiting for the rental references). As I said, are you willing to forgo some information for speed? My company says no.

As a tech / Marketing guy I would love to use an online service because of their speed and geeky tech things they offer. We live in a fast world now... a lot of people aren't willing to wait several days. It's possible to be approved for a car loan within minutes...why not an apartment?

Re:Applicant Rental History Verification 11 years 5 months ago #3714

I understand where you are coming from Bill, but let's take the THIRD Household member as follows:



Monthly combined application income to rent ration exceeds 2.5 PASS

Gross monthly infome after rent and estimated debt exceeds 25% of monthly income FAIL

Maximum percentage of past due negative accounts is less than 25% NO CREDIT

Unpaid collections and grossly delinquent past due balances do not exceed $1000 PASS

May have been through a bankruptcy PASS

Has not had an eviction lawsuit or landlord collection filed PASS


Let's say this household member (not a party to the foreclusure or bankruptcy) wants to apply on their own for a smaller floorplan. Let's also say that this person discloses an eviction that the On-site (or other background check) does not discover, but proves the judgement was paid. Would you approve this member on their own? This person initially failed the one key point, but the figures were miscalculated and redone; so the applicant actually passes.
Last edit: by Johnny Karnofsky.

Re:Applicant Rental History Verification 11 years 5 months ago #3715

It's hard to answer your post Johnny because there are more factors here than just PASS / FAIL. As a tech guy I love the concept of "one size fits all" electronic screening. The fast of the matter is every application has unique circumstances and must be handled in a unique fashion. It's why even though our screening can take upwards of 2 days or more it allow to you analyze a prospect with more than just PASS FAIL.

As I've already stated, you cannot answer the question because you do not have enough information to do so.

Re:Applicant Rental History Verification 11 years 5 months ago #3722

As an "investigative" screening company, we STRONGLY encourage rental verification as part of your rental qualification process. If you wish not to outsource this step to a screening company and incur the cost in doing so, then in the very least, you and/or your staff should be picking up the phone to very their most current rental history (in the least).

The eviction you are looking for, is the one that is happening RIGHT now! It is VERY unlikely that that information will show up on any eviction search that you run due to the delay in the court that is being accessed OR the database that your screening company is utilizing.

Please note that some database records (depending on the state/county) are only updated quarterly at best. There is a difference between companies, as to what resource is being used to search public records. Be sure to clarify these details with your current screening vendor.

To take it a step further, we would also encourage you to verify additional addresses reporting to the applicants credit. How likely is it that they are going to provide an address on the application of the location where they are currently being evicted? If the addresses on the credit do not match that on the application, ask "WHY?".

Check with your current vendor to find out if they are verifying additional addresses. When I say verify...I mean, are they picking up the phone and making the calls.

If you would like to discuss further, please do not hesitate to contact me! This email address is being protected from spambots. You need JavaScript enabled to view it. www.moco-inc.com
  • Tami Bettendorf
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Re:Applicant Rental History Verification 11 years 5 months ago #3723

We check the last 2 years rental history in addition to using a screening service. Personally I think this is a MUST. Having worked for a company in the past that only used a screening service I have seen one resident whom I evicted myself move to my sister community next door, be evicted from there and move to another property owned by the same company. All of the properties were offering large rent concessions and she was able to live for about 6 months rent free! Needless to say she was eventually evicted from there as well and had the nerve to come back to the community I evicted her from because she knew I was gone. Unfortunately for her I was covering the office and found her application in process and was able to finally get her out of our hair!!
It's amazing what people will do, and taking a little extra time to cross check things can save you a ton of money in the future. Making nice with your competition is also very helpful. Although there are about 160+ communiteies in the county I work in most of us have formed some sort of relationship and will not hesitate to pick up the phone and call a competetor to get "the scoop" on a prospective resident.

As to the bankruptcies, we will accept only if it has been discharged.

Re:Applicant Rental History Verification 11 years 5 months ago #3724

"Online Screening Company"

Let me provide some additional clarification on "Online Screening Company" vs. NOT.

I believe you can categorize screening companies in one of two ways; but not by whether or not they are "online". It would seem that this thread speaks to the quality of the screening when referring to "online", so I think it is important to clarify.

There are "Investigative" Consumer Reporting Agencies and "Computer/Database" Consumer Reporting Agencies.

While very different, I have seen both "Online".

Computer/Database Consumer reporting agencies, often rely on database information for their public records (criminal/eviction) information. It is likely that if using this model, your staff is entering this information into the computer and you are obtaining information instantly (or very close). The service is quite fast!
You may or may not be getting reports that include recommendation or a yay or nay based on credit score and income multiples.
It is fast because all, if not most of the information is being generated by the computer. Public records are only being searched on the name that you have entered into the system. Often times, you may also see similar name matches show up on the public records area of your reports.


Investigative Consumer reporting agencies often take a more hands on approach to screening. They have investigators employed to physically look at the application, review each individual trade-line, confirm similar name matches on public records, do additional searches on alias information and provide rental and employment verification. They do not rely on a computer generated recommendations, but instead rely on an idividual to identify these items and consistantly apply customized criteria.
Quality vs. speed takes an upperhand.
(ex. 1/3 of all public records hits are the result of additional searches on AKA's and out of state addresses. What could you be missing without AKA searches?)

Some "investigative" companies can provide credit/criminal/eviction reports back within a couple hours. Rental and employment verification in 24-48 hours.

Again, both types of these services can be found "Online" and are web-based solutions. If you are concerned about quality, you don't want to rule out a company simply because it is "Online" and or web-based. You could be overlooking a company that is a good fit for you.

What kind of credit reporting agency you use depends on what is important to you and your firm.
Some important variables to consider: Quality, Service, Turn-around time, Liablity, Property type (A,B,C??)
  • Tami Bettendorf
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