Ammone Phavone didn't understand why a sheriff's deputy was on her doorstep with an eviction order. She scurried inside to get her lease. She told him she'd always paid her rent.
Unfortunately, the landlords hadn't paid the mortgage. They'd lost the Baltimore rowhouse to foreclosure months earlier, and now the lender - finally able to take official possession - was making sure it was empty. A real estate agent acting as the lender's representative was just as surprised to find Phavone there last month as she was to hear that she'd have to leave.
"I cannot move out today," she said, standing on her doorstep, clutching her lease.
More and more renters like Phavone are unexpected casualties of the housing bubble's bursting, which has reverberated through the economy, putting a lid on consumer spending, stagnating sales and sending foreclosures soaring. Regular homeowners aren't the only ones defaulting on their loans - landlords are, too, and it's their tenants who end up ousted from the homes. And since they aren't part of the foreclosure process, renters often have very little warning that they must find another place to live.
"We run into a lot where the owners, they're not communicating with the tenants," said Deputy Andre Saunders with the Baltimore City Sheriff's Office.
While such cases have always existed, the excesses of the housing boom laid the foundation for the run-up in the number of displaced renters. Lured by fast-rising prices and easy mortgages, real estate investors and speculators snapped up properties in unprecedented numbers across the country and descended on Baltimore in particular. Seventy percent of city home sales in 2005 went to "non-owner-occupiers," according to state assessment records. Even in the first half of 2006, as the housing market was rapidly cooling, most city buyers were investors.
Many were neophytes who planned to rehab and quickly resell. They turned to renting when the slumping market made Plan A difficult - and some found Plan B worked no better, never mind if they found reliable tenants. Rent money didn't stretch far enough to cover expenses and keep up with loan payments, or they were juggling too many houses.
"They might be taking that money for another property that they're losing money on or they're rehabbing," said Alan Chantker, president of the Mid-Atlantic Real Estate Investors Association. He figures he gets a call every other week or so from a foreclosure-displaced tenant in search of housing, even though he's not involved in the rental side of the business.
