Landlord Gets The Squeeze As Lender Refuses To Renew Short Term Balloon Mortgages; Bank Opts To Foreclose Instead Despite Prompt Payment History

In Springfield, Missouri, KYTV Channel 3 reports:

• Imagine never being late or missing a payment, but still losing your home to foreclosure. It's happening across the nation to owners of rental properties. An owner of multiple rental properties can't typically get a traditional loan, so he'll get a one-, three- or five-year note that's renewed when it expires. Several property owners in the Ozarks are getting turned down for renewals even though they've never been late or missed a payment. The result is they lose their properties to foreclosure and the income that goes with it.

• When Don Hosey got into the home rental business nearly a decade ago, he never imagined this is how it would end. "That's how I feel. They don't care," Hosey said about his bank.

• He owns 10 properties in Springfield. He say he's never been late on a payment. He's never missed a payment. In fact, his properties were making him a profit of about $2,500 a month. So he can't figure out why his bank would refuse to renew his loans. Instead, it sent him a letter demanding that he immediately pay off the loans on all 10 properties. "I have to pay the balances on all properties or they take them back and foreclose on me," he said.

• In fact, they've already foreclosed on two properties, including a six-plex, his biggest money maker. His bank didn't return a reporter's calls but told him why they wouldn't refinance his loans.

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• Hosey is not alone. The owner of Metro Housing Finders, an organization that places tenants, says he knows of at least a half dozen owners in the same position.

For the story, see Banks foreclose on rental property owners with excellent payment histories.