In the face of crippling foreclosures in the Grand Canyon State, one state legislator wants to give home owners the option to rent their foreclosed homes for a year, repots KTAR.com. But is the alternative option to traditional foreclosure a good idea for the state?
Rep. Anna Tovar believes that the program would help stabilize neighborhoods and minimize the trauma for families.
“There is no silver bullet to stop the foreclosure crisis,” Tovar told KTAR.com. “But this will at least give people another option.”
The alternative is one version of a broader effort to give owners the right to rent their foreclosed properties. Dean Baker, co-director of the Center for Economic and Policy Research, proposed a controversial plan back in 2007 which allowed homeowners to rent indefinitely.
The critics reportedly came from the mortgage company sector, who argued that a renter plan such as Baker's would devalue homes because new owners would be forced to rent at distressed rates, according to The Huffington Post.
For now, most Arizona borrowers who want to rent back their foreclosed homes must rely on the willingness of individual mortgage-holders. That is, unless Tovar's bill passes.
Under Tovar's plan, the beneficiary of a potential foreclosure sale would not be able to sell the property for at least one year if the previous homeowner paid monthly rent, according to Cronkite News Service. The rent amount would be decided by justice courts according to the fair-market rent of similar properties.
In the meantime or in case Tovar's bill doesn't pass, there are other alternatives Phoenix homeowners can consider besides foreclosure. For example, a Phoenix bankruptcy attorney can provide more information about how filing for bankruptcy can potentially postpone foreclosure proceedings. This solution is not for everyone, however, and you should consider consulting a financial or legal expert on your options.
For more general information on alternative options to foreclosure, see our Related Resources section.
- Find a Phoenix Bankruptcy Attorney (FindLaw)
- Facing Foreclosure? How Bankruptcy Can Help (FindLaw)
- Betting the House: Reality TV Show Spotlights Phoenix Foreclosures (Phoenix Bankruptcy Law News)