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Brent Williams' Apartment Blog

Thoughts, comments, and ideas about the overall multifamily industry, as well as a property-specific focus on resident retention and apartment marketing.

Pulling Foreclosures Into The Fold

If you consistently read Grace Hill, you may already be up to date on this particular discussion, but for a moment I would like to talk about the foreclosure problem in the U.S. and how it affects our industry, in particular. Now, I must note that I am not well versed in the specifics of foreclosure proceedings, so if you notice some problems with this logic, please let me know. There are two facets to this argument in relation to accepting these people back into our apartments. The first relates to the foreclosure itself - some see these borrowers as those that do not respect the obligations of the loan; therefore, we cannot trust them to respect the obligations of any lease, either. The other aspect is that even if we adjusted our screening process for the foreclosure itself, the borrowers may have already wrecked their credit beyond repair.

When dealing with the foreclosure itself, I think we should consider, as an industry, lessening the screening criteria to allow more of these displaced residents into our communities. This is a great way to take "market share" back from single family homes, by making our industry viewed as a compassionate alternative, which seamlessly fits into our other benefits of hassle free living. I don't buy the argument that these people are now destined to back out on every lease and loan they ever get. It just doesn't make any sense that there would suddenly be this many new people surface that don't respect the contracts they sign.

This does not mean, however, that we lessen other key screening factors, such as remaining credit issues. If a resident has unfortunately racked up thousands on credit cards trying to save their home, for example, we just can't help them without taking too much risk. So I am not suggesting we break down every wall and barrier and let a flood of residents come in to the fold, but there is a very strong argument for taking a risk-averse tactic on improving our own occupancy industry wide.

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