It would appear that we may have a new word candidate for the mighty review board at Webster's. Rentership is a new phenomenon that is pervasive throughout our real estate economy. It is hidden below the radar and often not breached in conversation due to its unpopular appeal. Regardless, Rentership defines the thousands of homeowners that are stranded in properties where the mortgages owed, plus the costs to sell, exceed the value of the home. These owners are defined as renters with full ownership responsibilities. When the roof needs replacing, or the appliances breakdown, a call to the lender falls on deaf ears. This is the homeowner’s responsibility regardless of equity or no equity.
Rentership is prevalent because of the government sponsored and private loan modifications since 2008 in conjunction with the HARP refinance programs. These programs have promoted steps for underwater homeowners to obtain short term remedy with no longer term solutions. This is what a managed crisis looks like. The market never cleared and people are stuck with all the debt in Rentership.
How do you solve Rentership? This is very difficult to address and ultimately solve but here are a few examples:
Whether we chose to solve the problem or ignore it we cannot underestimate its negative affect on neighborhoods and the economy as a whole. Rentership is going to be with us for an extended period of time. If you find yourself caught in this situation, save this for one of your New Year Resolutions.
George H. Omilan