Herald News

Foreclosure Not An Impediment To Finding Rental

Herald News — Sunday, December 13, 2009

BY DONNA ROLANDO
SPECIAL TO THE HERALD NEWS

Is there life after foreclosure? Some find that renting an apartment is a test of endurance after foreclosure has put a big black mark on their credit reports.

It may seem like a plight that cannot get any worse — after all, the bank has taken their house, and now landlords may be shaking their heads.

There's no question credit plays a big role in getting an apartment, and whether a landlord runs a credit check is beyond a tenant's control.

Yet the tenant can sweeten a negative credit score with honest talk on his financial situation, past and present, perhaps winning over a landlord.

Although it cannot be glossed over, "a foreclosure is not necessarily a disqualification," said Conor Fennessy of Monroe-based New Jersey Apartment Association, representing the managers and owners of 160,000 rental units.

"This is a challenging economy, and certainly our members look at some applications differently than they did in the past, when the economy was rolling along."

What NJAA members want is "honesty and forethought," then they will look beyond the foreclosure to the "totality of the application," he said.

Of course, all this honesty works best when there's something promising in the candidate's profile to offer the landlord. It's not smoke and mirrors, but hard work in the financial arena — often debt counseling — that will put the foreclosure in its place.

"They need to immediately begin to establish good credit and bring up their credit score," said Phyllis Salowe-Kaye, director of New Jersey Citizen Action, which provides credit counseling.

From her experience, Salowe-Kaye knows that very often, foreclosure is just one of many negative strikes on a credit report. Since housing is the first bill people should pay, she said, "We have to assume there are other bills they're behind on," and that they're in need of debt counseling.

Sounds painful, but this is the type of corrective action that shows efforts to turn off a path of poor financial management, she said.

Have a good record of timely utility payments? Show the landlord and it might win some points. Also illustrate a steady employment history with recent pay stubs and an employer's letter.

"If you could give a rationale for why it happened, some might listen," said Kate McAteer of Women in Transition, a counseling agency in Wayne.

"You need to be able to explain what and why there is any derogatory information on your credit," said Anthony Suber, director of operations for Urban League for Bergen County. "It's more or less using your explanatory skills and seeing whether it will be accepted or not.

Other paths to housing after foreclosure might include:

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