Certain homeowners and investors seem to be collecting rent from unsuspecting renters and forgetting to send their mortgage payment to their lender. I like to call this new unfair and deceptive business practice perpetuated by American consumers, “predatory renting.”

I wrote about this in November of 2007:

The perfect crime is being perpetuated across America and there seems to be no laws or any way to prevent it. 

A new scam has been born with the advent of foreclosure boom. Predatory Renting

“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.” Real estate flippers and investors are apparently renting their homes, not paying their mortgage and skipping out of town with their renters cash and security deposits. Leaving unsuspecting tenants to suffer and be kicked out on the street, often with only 72 hours to vacate and move their belongings. 

Many renters say they never even knew their buildings were heading for foreclosure.

This is an epidemic that is hitting almost ever city in the country and it is only getting worse by the foreclosure second.

Take a look at this new study about the New York housing market.

Nearly 60% of the 15,000 foreclosure filings in New York City in 2007 were on 2 to 4 family or multi-family buildings, leaving a significant number of renters threatened by foreclosure. A conservative estimate puts the number of renter households impacted at about 15,000.

A new analysis by NYU’s Furman Center for Real Estate and Urban Policy finds that a majority of the nearly 15,000 mortgage-related foreclosure filings in New York City in 2007 were on multi-family buildings, and only about 40% were on condominiums or single-family homes.

The analysis shows that over 30,000 households (or about 76,000 New Yorkers) are living in properties that entered the foreclosure process in 2007. The Center estimates that more than 15,000 of these households (or some 38,000 New Yorkers) were living in rental units. This is a conservative estimate, because the analysis assumes that an owner lives in one of the units in all 2-4 family buildings, but in all likelihood, some of those buildings are completely occupied by renters.

More from November 2007 and here we are 8 months later:

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.