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A California housing crisis mystery: Rents are way up this decade, but eviction filings are way down | News

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Shirley Gibson isn’t quite sure how to feel about these numbers.

As directing attorney of the Legal Aid Society of San Mateo County — which offers legal services to low-income tenants caught between the preposterously priced southern suburbs of San Francisco and the preposterously priced suburbs of Silicon Valley — she’s seen firsthand how California’s housing affordability crisis has overwhelmed her clientele.

Rents in San Mateo County have increased nearly 55% since the start of the decade. A two-bedroom in Redwood City, the county seat, now goes for $3,500, according to data from Apartment List. Strong demand, fueled by the influx of high-income tech workers, means vacancy rates are low.

“I don’t know what a normal housing market is anymore,” said Gibson. “There’s a tush for every seat right now. You can rent any unit you want within a week.”

Theoretically that should have swelled the ranks of tenants needing her to defend them in eviction court. Ever-escalating rents should make it harder to pay rent on time, and delinquent payments are the most common reason a landlord sues to remove tenants from their property. Cutthroat demand presumably would spur landlords to evict more readily, knowing they won’t risk months of lost revenue in a post-eviction vacancy.

Yet eviction lawsuits against San Mateo renters from 2010 to 2018 dropped nearly 50%.

“This year is going to be the lowest you’ve ever seen,” said Gibson. “I don’t have a perfect explanation for why that is the case.”

It’s counterintuitive amid a worsening housing crunch, but it’s happening statewide.While the median rent in California increased 23% between 2011 and 2018, the number of times California landlords sued their tenants to evict them dropped by nearly 40% over roughly the same period, according to data collected by UCLA researchers.

Two crucial caveats: Those dropping numbers nonetheless represent a significant number of California renters facing the prospect of a court-ordered eviction — landlords initiated more than 137,000 of them in fiscal year 2017. And there’s no data on evictions that don’t end upin court, although researchers estimate they’re about twice as common as those that do.

Still, the data shows a steep and steady drop in eviction court cases this decade in every sizeable county — with cases diminishing more in some of the priciest areas.

“It’s a puzzle that I’m not sure we have an answer to,” said UCLA eviction researcher Kyle Nelson.

Are landlords simply expanding efforts to evict tenants outside the courts? Have attempts to beef up legal aid to low-income residents paid off?

Neither academics nor landlords nor tenants can say definitively. But here are some of their best guesses.

Evictions outside court could be rising (but we lack data to know for sure)An unfavorable court judgement hangs an enduring legal albatross on renters — what some have termed “the Scarlet E.” In California, evictions stay on a tenant’s rental history for seven years, during which it becomes incredibly difficult to find another place to live.

But eviction lawsuits are one of the few forms of eviction that actually leaves a data trail. And that only happens if a renter stays in an apartment after being served with an eviction notice, forcing a landlord togo to court.

Landlords have plenty of other options. California doesn’t know how many families move out after a “three days to pay rent or quit” sign is affixed to their door, let alone how many strike “cash for keys” arrangements or other informal agreements to leave. (If a renter moves out because the rent is raised, that’s not an eviction).

Eviction researchers say even absent data, there’s good reason to think these undocumented evictions could be on the upswing. High rents and low vacancies mean landlords may be more willing to waive delinquent rents, buy out tenants or otherwise induce or threaten them, to get them to leave.

“Say there’s more rent increases and more tenant harassment, and either way a tenant has to move,” said Aimee Inglis, program director with Tenants Together, a statewide renter advocacy group.

Gibson, the San Mateo tenant attorney, says she’s seen a dramatic uptick in “no-fault” evictions over the past decade, even as court cases have declined. Until a new

California eviction protection was passed in 2019, landlords could force renters to leave after their leases expire without giving a specific reason why, as long as they’re given 30 or 60 days notice.

Why have landlords used “no-fault” evictions?

Say a landlord suspects a tenant is dealing drugs on their property, but lacks proof. If the tenant fights that in eviction court, the landlord could very well lose. But if the landlord simply sends a “no-fault” notice that a tenancy will end in two months, the renter is typically out of options.Renter advocates say landlords often abuse “no fault” evictions to retaliate against tenants who ask for expensive repairs or maintenance. The practice can also camouflage illegal discrimination.

“Instead of these fault-based cases, we’re getting these much harder to defend no-fault types of cases where legally they are harder to wrangle,” said Gibson.

In 2013, roughly half of the eviction notices clients brought to her legal aid clinic were “no-fault” lease terminations. By 2018, that share had increased to 75% — a more common reason than non-payment of rent.

There’s no statewide data on the number of “no-fault” notices. Reports of their prevalence have surged in recent months because a new state law is about to restrict them. After Jan. 1, most landlords will be required to cite one of several acceptable reasons for evicting a tenant.

It’s partly the economy — but that’s not the whole story.

As the Great Recession of the late 2000s ravaged California’s economy and housing market, eviction lawsuits spiked. Adding to the misery of unemployment reaching levels not seen since the Great Depression, banks and corporate landlords frequently served eviction notices to families who lost their homes in foreclosures. The result: nearly 230,000 eviction court cases in fiscal year 2010.

Landlords say eviction lawsuits also increased during that time because the same population most vulnerable to foreclosures —families with shoddy credit histories and incomes too small for their mortgages —were likely to miss rent payments after they moved from foreclosed homes into rentals.

“You had individuals with bad credit, maybe not a lot of assets, and they moved into apartment complexes,” said Chris Evans, an attorney with the firm Kimball, Tirey and St. John, which represents landlords in more than 15,000 eviction lawsuits a year. “Inevitably those individuals, with the economy struggling, faced evictions as well.”

As California’s economy slowly rebounded, eviction cases began their decade-long descent.

But Nelson, the UCLA researcher, says that the state’s economic recovery is only part of the story. In L.A. County, the highest recorded number of eviction lawsuits were actually filed in the early 2000s, during the comparatively much milder recession associated with the dot-com bust. Eviction rates in the mid 2000s were higher in many Southern California counties than they are today, despite cheaper rents.

Most mysteriously, eviction lawsuits have continued to drop years after the state emerged from recession, even while rents have outpaced gains in renters’ incomes.

Has legal aid for tenants helped?

Tenant groups and landlord lawyers agree that over the last decade, it’s become a lot more expensive to take a renter to court.

“Because of the cost of eviction, landlords really started working to avoid it,” said Evans.

He estimates that a decade ago, his firm’s landlord clients spent under $1,000 to get rid of a tenant who contested an eviction. That included attorney fees,

court filing fees, sheriff lockout fees and other costs — all costs renters risked having to pay if they lost.In the vast majority of eviction lawsuits, tenants represent themselves.

Now, if the renter takes the case to a jury trial — an option tenants have increasingly threatened over the last decade on the advice of counsel, says Evans — it costs his clients between $10,000 and $15,000. And a jury trial is a gamble for landlords.

Tenant attorney Gibson cites San Mateo as an example of how expanded tenant legal services can change landlords’ eviction calculus. Her legal aid organization, buoyed by increased philanthropic support, has seen its practice expand from a one person team to a six-person team over the last 12 years.

“Suddenly there’s more lawyers in the community, more defense to (court eviction proceedings), so it’s getting harder and more expensive for landlords,” she said.

As a response to the foreclosure crisis, in 2009 state lawmakers created low-income legal aid pilot programs in several high-cost counties. An independent evaluation found that renters represented by state-funded attorneys were nearly 20% less likely to lose by “default judgement,” where landlords win simply because a renter doesn’t show up to court.

Is technology allowing landlords to better screen tenants?

As recently as a decade ago, the process for screening a rental application was fairly basic. Landlords ran a potential tenant’s credit report, and that was pretty much it.

Now, due to an explosion of third-party renter screening services, landlords can quickly and easily view much more data about prospective renters —whether they pay utility bills on time, whether they pay rent on time, whether they have a prior criminal conviction.

Fueled by technological innovations, the screening services are fairly cheap —$50 gets you a lot of info.

“It’s just a much better picture of a resident’s ability to pay prior to them moving in,” said Cynthia Wray, who’s been in the apartment management industry for nearly three decades. “And we just didn’t have that 12 years ago or more, and I think that’s made a huge difference.”

Corporate landlords and real estate investment trusts, who over the last decade have snapped up a sizable chunk of California rentals, are major utilizers of sophisticated screening services. As opposed to “mom and pop” landlords who might own one or two properties, investment firms have rigid rules about who they will and won’t accept as tenants.

Has the state gentrified so much that those at risk of eviction just left? Possibly.

That appears to be exactly what happened in Washington D.C.

Much as in San Francisco or Los Angeles, the cost of living in Washington D.C. exploded over the last two decades. At the same time, eviction lawsuits steadily dropped while the city’s low-income housing stock shriveled as neighborhoods gentrified.

“As DC got more expensive, it got too expensive for people to rent if there was any chance they had any financial problem,” said Maya Brennan, senior policy associate at the Urban Institute. “So renters with low incomes have either been pressed out over the past ten or so years, or pressed into a ‘shadow rental market'” — when tenants live in warehouses or garages not sanctioned as legal dwellings.

Brennan says it’s more likely these low-income renters are now in more affordable suburbs in Virginia and Maryland.

That logic could extend to California, which for nearly two decades has lost more residents than its gained from other states — an exodus fueled by Californians making less than $50,000 a year.

But many more of those low-income Californians simply moved to cheaper places in-state. Bay Area rent refugees have flocked to the more affordable climes of Sacramento and Stockton. Los Angelinos are retreating to Riverside and the Inland Empire.

You’d expect eviction suits to tick up in those counties as more vulnerable renters move in. But they haven’t.

Michael Lens, an urban planning professor at UCLA, recently tried to determine what made one Southern California neighborhood more likely than another to see landlords initiate formal evictions. One hypothesis: gentrification.

“The conventional wisdom is that landlords will be more aggressive in trying to push people out…when they think they can get somebody who will pay more,” saidLens. “But that’s not what we find, on the court side of things.”

Instead two factors had a stronger correlation with eviction filings than rising rents: whether a neighborhood was very poor, and whether a neighborhood had lots of African-Americans.

Despite lots of national publicity in recent years, eviction research is still in its infancy. Which means a definitive answer for California’s counterintuitive trend may not surface for awhile.

“Evictions are incredibly complex, and the world of people thinking about them deeply expanded dramatically over the past couple years,” said Brennan. “But the number of people with enough regionally specific knowledge has actually not increased that much.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California’s policies and politics. Read more state news from CALmatters here.

Follow the Palo Alto Weekly/Palo Alto Online on Twitter @PaloAltoWeekly and Facebook for breaking news, local events, photos, videos and more.



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Can I be denied a job due to bad credit?

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Can I be denied a job due to bad credit?
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People often worry about their credit history when it comes to applying for a new credit card, a mortgage or a car loan. If you have poor credit, should you also be concerned about finding work? Can you be denied a job due to bad credit?

Let’s examine the facts.

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What is bad credit anyway?

Bad credit is basically a negative assessment of your finances based on your history of borrowing. Bad credit implies that you have a bad track record with lenders. This is most likely because you have a pattern of not paying your bills on time or defaulting on your loans.

Is it legal for employers to check my credit report?

Law and finance firms are legally required to perform credit checks on potential employees. However, other kinds of employers can also conduct credit checks on you before they hire you. But they must ask for your permission before they do so.

In many cases, a credit check will be performed by a company if the role you are applying for involves dealing with large amounts of cash.

Why might employers want to check my report?

There are many reasons an employer might want to check your report. For example, they might want to ensure that:

  • You are who you say you are.
  • You have a good track record of managing money.
  • It’s not too much of a risk to let your manage money.
  • Your financial behaviour will not affect your work performance.

Could you be rewarded for your everyday spending?

Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. MyWalletHero makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.

Can an employer deny me a job due to bad credit?

Yes. According to credit reference agency Experian, if your prospective employer feels that your current financial situation could impact your ability to perform well in the role, or if your credit history shows poor financial planning, they may decide not to hire you.

Generally speaking, however, employers are more likely to be concerned about serious ‘red flags’ in your credit history, like bankruptcy rather than the odd missed payment.

In any case, employers only get access to your ‘public’ credit report. This contains your electoral roll information and any major red flags such as bankruptcies, individual voluntary arrangements and county court judgments.

They will not have access to your detailed credit repayments or your credit score.

How can I keep my credit history from affecting my ability to get a job?

If a prospective employer runs a credit check on you, ultimately you have no control over what they do with the information, including denying you a job due to bad credit.

The best thing you can do to minimise the impact of your credit on your chances of getting a job is to review your credit report beforehand.

You have the right to one free credit report per year from each of the three credit agencies (Experian, TransUnion and Equifax). Before you apply for a job or attend an interview, request your report and review it for any errors so that you can have them corrected ahead of time.

Even if there are no errors, knowing what is on your credit report puts you in a good position to answer any questions that may arise during the hiring process.

Indeed, if there’s something in your report that employers might consider a ‘red flag’, don’t panic. Instead, begin preparing an explanation to give to them. If it was, for example, caused by financial hardship beyond your control, the employer may take this into account.

Alternatively, you can contact a credit reference agency and request that a notice of correction be added to your report. This is a brief note of up to 200 words in length that explains circumstances that a lender might otherwise question.

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Refinancing Your Subprime Auto Loan

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Refinancing is a wonderful way to save money on your monthly car loan payment – but it can cost you more in the long run if you’re not careful. Refinancing when you have a subprime auto loan isn’t always as easy as refinancing a vehicle when you have good credit. Working with the right lender can help, though.

What Is Refinancing?

Refinancing is when you replace your existing car loan with a different one for the same vehicle, which may have either a lower interest rate, a longer loan term, or both.

Qualifying for a lower interest rate is optimal for getting a lower monthly payment and saving money overall. If you only extend your loan term without getting a lower rate, you actually end up paying more in interest charges over the term of your loan.

Auto loans typically use a simple interest formula, meaning your interest charges add up daily. The longer your loan term, the more you pay the lender – it’s wise to choose the shortest loan term you can afford. If you only extend your loan term you may end up paying more than the vehicle’s value!

Refinancing can typically be done with your current lender or with another one. It’s a good idea to shop around for the best possible rate before going with the first offer you receive. When you shop for the same type of financing with multiple lenders in a two-week timeframe, it’s called rate shopping. When you do this only one credit inquiry impacts your credit score instead of multiple, minimizing the negative impact that hard pulls can have on your credit score.

Options for Bad Credit Borrowers

Taking out a subprime auto loan is a great way to improve your credit, so, if you’ve kept up with your loan to this point and just need a little wiggle room in your budget, refinancing could be for you. Your credit is an important factor in refinancing your auto loan because refinancing is typically reserved for people with good credit.

However, when a borrower already took out a subprime car loan, many refinancing lenders are willing to work with them as long as they’ve made improvements to their credit over the course of the loan. Better credit alone doesn’t qualify you for refinancing, though.

In order to qualify for refinancing, you, your vehicle, and your loan all need to meet the requirements of a lender. These vary, but in order to refinance your car you typically need to meet these qualifications:Refinancing Your Subprime Auto Loan

  • Have a better credit score than when you began the loan
  • Have had your auto loan for at least one year
  • Have an acceptable loan amount
  • Have no more than 100,000 miles on your vehicle
  • Car can’t be more than 10 years old
  • You must be current on your payments
  • There can’t be negative equity in the vehicle

Lenders that refinance typically prefer cars that are in good condition, that aren’t too old, and have lower mileage. Some lenders may not want to refinance a vehicle that’s at risk for breaking down or is depreciating quickly.

They’re generally looking for a loan that isn’t too new, or too close to being paid off as well. And, refinancers may also require that you haven’t missed a payment on your original car loan. A borrower whose current on their loan gives a lender confidence you’ll manage the new loan well.

Alternatives to Refinancing Your Subprime Auto Loan

If you’re not able to refinance your vehicle, you typically still have the option to trade it in for something more affordable. Even if you’re still paying on a loan, all you have to do is pay off the loan to release the lien on the car.

Even if it’s years from the end of your loan term, you may have a good chance at trading in your vehicle, especially now. Due to fluctuations in the auto market, used cars are in high demand currently, which means that dealerships may be willing to pay a higher price to get your used vehicle on their lot – even if you’re a bad credit borrower looking to trade-in.

If you still owe on an auto loan this gives you a better chance at selling your car for the amount you owe to the lender. It may even give you enough cash left over to put toward your next, more affordable vehicle!

Ready to Get Started?

If you think refinancing your subprime auto loan is the way to go, you can check out our resources, here. But, if you think that finding an affordable, used car with a lower monthly payment is the right choice for you, we want to get you started toward your goal today!

At Auto Credit Express, we’ve got a coast-to-coast network of special finance dealerships ready to work with borrowers who are struggling with credit challenges. To get connected to a dealer in your local area that’s signed up with subprime lenders, simply fill out our auto loan request form. It’s fast, free, and never carries any obligation.

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It’s Time to Break Up With Your First Credit Card

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Many of us got our first credit cards when we were either in college or in our early 20s. We likely did not have a full-time job with a steady salary, and if we did, it’s also likely we weren’t rolling in dough.

See: 13 Credit Cards That Every 30-Something Should Consider
Find: Surprising Uses for Your Credit Card Rewards

Given these circumstances, the first credit cards offered to us were probably of a particular kind: low credit limits, no prior credit history required, high annual percentage rate and overall easy to get. While these cards served us well as a way to build up our credit — and probably learn some lessons about money the hard way — it’s time to let go for a couple of reasons.

The Benefits of Upgrading Your Card

When you upgrade your card, it’s likely you will also upgrade the benefits. Some companies, like Discover, Credit One and Capital One, are popular choices as a first credit card. However, these companies have better options as you, and your finances, mature.

The Wall Street Journal suggests asking for an upgrade. “Customers need to phrase it as a ‘product change’ when they call the card company. A product change involves getting a new card with the same card provider and it typically allows a cardholder to keep everything else the same, including the account number and available credit.”

See: 10 Credit Cards That Have Gotten Better During the Pandemic
Find: Old-School Money Advice You Shouldn’t Follow Anymore

This could be a good idea for those who are not ready to jump ship from their first credit company just yet. It also removes the hassle of having to find a different provider, and probably the largest benefit of all — no hard credit check needed.

A “hard” credit check is when your credit is thoroughly examined, and it results in an inquiry showing up on your credit report. These are always necessary for opening a new line of credit, like a credit card or a mortgage, but too many inquiries can count against you and negatively affect your credit. A “soft” credit check, on the other hand, will not affect your credit score and is usually done for verification purposes, such as when you apply for new employment. Soft checks also happen with preapprovals.

See: Soft vs. Hard Credit Check — What’s the Difference?
Find: 30 Things You Do That Can Mess Up Your Credit Score

If you ask for a product change on a credit card, you won’t need to have that hard inquiry because the company already has a solid picture of your credit and has done an inquiry before. But it’s important to confirm that your credit history will be rolled over to the new card.

Switching credit institutions all together can be beneficial, depending on what you’re trying to achieve. While the rules of credit apply whether you have, for example, a Credit One or Chase credit card, it’s not a secret that certain credit cards have certain reputations — or that credit bureaus take notice.

For example, the Credit One Bank Visa card is “one of the most popular credit cards for people with bad credit, largely because it’s one of the few unsecured cards that applicants with poor credit scores can get approved for,” according to WalletHub.

See: Biden Wants to Shut Down Credit Bureaus – What Would That Mean for You?
Find: 10 Credit Score Myths You Need to Stop Believing

In contrast, American Express credit cards are best for people with credit scores over 700 and require at least “good” credit for approval, WalletHub adds. A good credit score is one that’s between 670 and 739, according to Fair Isaac.

So while both cards function the same way, the profile of those who own these cards might be different — or at least be perceived as such.

Theoretically, the same person could own both cards, but your money works for you more with an American Express vs. a Credit One. If you have a Credit One card but qualify for American Express, it might make sense to leave your old credit card behind. In addition to the immediate financial benefits, upgrading for a credit card company that has a reputation for being exclusive to those with good credit could help when you apply for a mortgage or apply for credit cards at specific stores.

See: This Is How Many Credit Cards You Should Have
Find: Credit Cards With the Best Incentives to Open in 2021

The first question you should ask yourself is, “What is my card doing best for me?” If the answer is helping you build your credit, getting you out of bad credit or allowing you to have credit when you otherwise would not be able to, then sticking with the same card, or at least the same credit card company, makes sense.

This allows you avoid a new credit inquiry on your credit report while still building and increasing your credit. Asking for a credit limit increase on your credit card if you’ve been with the same company for a while, you’ve been routinely paying off your card and you’re in good standing, is a good idea.

See: Expert Tips to Fix Your Credit on a Limited Income
Find: What Is a Credit Limit?

If you are shopping around for a new card that gives you rewards or benefits based on your purchases, starting small is paramount. It wouldn’t be prudent to go straight for a card that has a yearly fee, for example.

Start small, and start smart with credit limits, too. Going from a limit of $2,000 straight to a limit of $15,000 while your salary remains relatively unchanged is not always a good thing. Having a higher credit limit doesn’t necessarily mean that you are now richer or more responsible — it only means that you now have a greater risk of putting yourself into serious debt. Slowly increasing your credit limit makes your debt more manageable — and makes you look more responsible to credit bureaus.

Breaking up is hard to do, but if your finances have matured, it might be time to get a card that helps you reach your goals with cash-back rewards and points you can use for travel, groceries and other other items. Shopping around for a lower interest rate and a slightly increased credit limit can also help you move forward.

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This article originally appeared on GOBankingRates.com: It’s Time to Break Up With Your First Credit Card

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