Drilling down in the crisis in the mortgage market gives you a very good idea of how bad things really are.  It is not just about big companies going belly up or hedge funds suffering.  It is about the little guy that has to take his lumps like every one else.

Across the nation, many renters are getting pushed out in the cold by the foreclosures on their homes or housing units.  Smaller speculators have gotten in over their head, and are losing rental properties.  Even though the renter has always paid the rent on time and been the best possible tenant going, this does them little good when the owner of the property they live in has made bad choices.  Now many of these renters have not only the problem of where to move to, but the problems of finding a place quickly and coming up with the deposit, which is usually the first and last month’s rent.

In Nevada, one of the hardest hit portions of the country, 28 percent of foreclosures which were on non-owner occupied homes.  That means renters are going to be out in the street.  The hard thing for renters is that they never know until the last minute that an eviction is pending, even though the law states that notification must be posted for four consecutive weeks before foreclosing on a property.  This is generally done in local newspapers.  It appears to be a good idea to read the local papers if you are a renter.

The House passed a bill Thursday that offers some protection to renters, strongly opposed by the lending industry.  The bill would require new owners to continue the leases of tenants for up to six months after foreclosure.  It is little wonder that there is opposition to the bill - the lenders want their money, and as the new owners of the property, wants to be able to sell to a more qualified buyer.

The House bill calls for new owners (read lenders) to give tenants a 90-day notice before foreclosure.  They must then continue the lease for up to 6 months.

The problem seems to be in housing unit owners who are overextended, and are borrowing at sub prime.  Possibly the new House bill will make lenders a bit more cautious.  In the interim, renters beware.