LAS VEGAS -- In the foreclosure crisis of 2007, thousands of American families are losing their homes without ever missing a payment.
They are renters in houses whose owners default on their mortgages - a large but little-noticed class of casualties. Some live in big apartments, others in houses owned by small investors who got in over their heads.
There are no exact figures for how many renters have been evicted because of foreclosures, but a survey taken earlier this year by the Mortgage Bankers Association found that one in eight foreclosures was non-owner-occupied. This figure probably underestimates the problem, according to the association, because buildings receive tax benefits if they are registered as owner-occupied. More than 1 million properties are expected to enter foreclosure this year.
Many renters say they never even knew their building was heading for foreclosure.
"This is an explosion," said Judith Liben, a lawyer at the Massachusetts Law Reform Institute. "This isn't business as usual. These are investors that overleveraged themselves, and the renters are collateral damage in the mortgage crisis."
Here in Nevada, which has one of the highest foreclosure rates in the country, 28 percent of mortgages that were in default earlier this year were for homes not owner-occupied, more than twice the national average, according to the Mortgage Bankers Association. Arizona and Florida, both leaders in foreclosures, are also well above the national average. In California, 22 percent of the properties lost to foreclosure this year were not owner-occupied, according to ForeclosureRadar.com, which tracks California foreclosure auctions.
Foreclosing lenders typically evict tenants so they can sell the property, said Vicki Vidal, senior director of loan administration and government affairs at the Mortgage Bankers Association.
"Banks don't want to be landlords," Vidal said. "They're in the business of making mortgages. You need to recoup the money to keep the process moving."
Unlike owners who lose their houses, renters do not stand to forfeit years of equity. And many can find comparable rentals.
Lara and Louie Northern, who live in a home that is in foreclosure in a new subdivision here, far from the Strip, say they have never been late on a rent payment. But each day in their four-bedroom house, they wonder whether this will be the day they get an eviction notice telling them they have 72 hours to leave the property.
