Tamika Shears says she never missed a rent payment, but she was still forced out of her home.
Her situation reflects a growing number of renters facing eviction because of the widening foreclosure crisis gripping Charlotte along with the rest of the nation.
Shears and her two children had lived in a four-bedroom house in northwest Charlotte for more than a year when their landlord lost the house to foreclosure.
“My first thought was, ‘Where are we going to go?'” she recalled.
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Homeowners displaced by foreclosures have received much attention. But legal and housing experts estimate at least one of every four homes in foreclosure in the Charlotte area is non-owner occupied.
Renters were similarly punished during the mortgage industry meltdown in the early 1990s, but this time problems are far more widespread, said Judith Liben, a lawyer with the Massachusetts Law Reform Institute. She testified before Congress last year about the issue.
“It's like you broke a dam,” Liben said.
The impact is swift. Often, evicted renters can't scrape together hundreds of dollars on short notice needed for first month's rent and security deposit for a new place. And the vacant houses they leave behind often become magnets for vandalism, drugs and other crime.
Foreclosures up 200%
Mecklenburg County has been hit harder than any other N.C. county in the mortgage crisis. Between 2000 and 2007, a city study found, the number of foreclosure filings jumped to 7,943 – an increase of more than 200 percent.
The county is on pace for 9,000 foreclosure filings in 2008, said Stanley Watkins, director of Charlotte's neighborhood development office. About half of those will result in the loss of a home.
Local officials say they haven't studied how many foreclosures involve rental properties.
But RealtyTrac, a national database of foreclosure activity, reports 29 percent of properties in foreclosure in Mecklenburg are either rentals or vacant. About 28 percent of homes in foreclosure in North Carolina and 33 percent nationwide are not owner-occupied, the database says.
Housing and legal experts said those numbers could be higher in Charlotte because renters in urban areas tend to be affected more than those in rural areas.
In many cases, the landlords are real-estate speculators who bought houses in starter-home subdivisions, Watkins said.
“They bought houses relatively cheap, tried to flip them and got caught” by the mortgage crisis, he said.
Other landlords in Charlotte who face foreclosure are apparently small operators who own mainly single-family homes, officials said.
Meanwhile, evicted renters with low incomes are scrambling to find scarce affordable housing. Charlotte lacks 9,300 homes affordable to families who make less than $16,000 a year, according to a city study.
Any day now, a company could auction off the house where Dian Digsby lives.
Digsby, 59, learned from her landlord in May that she faced foreclosure and would lose the northern Charlotte house by early July. The Observer could not reach her landlord for comment.
A former school bus driver, Digsby is now disabled and can't work. She receives about $720 a month in federal disability benefits, but the average apartment in Charlotte rents for $734 a month.
She said she could not afford to save the hundreds of dollars needed to pay for the first month's rent and security deposit needed to move into a new place. Now, Digsby said she is in a race against time to find the money.
“I don't know when the sheriff's gonna come and say, ‘You gotta go,'” said Digsby, who was once homeless. “I don't want to be on the street anymore.”
30 days to move out
The N.C. General Assembly last year passed legislation that requires new landlords to give renters 30 days' notice when a property is in foreclosure.
Lawmakers meant to give tenants more time to find a new home. Previously, renters were often forced to leave their homes in less than 10 days, said Bill Rowe, general counsel for the N.C. Justice Center, a Raleigh-based advocacy group.
But the law is far less generous than in some other states where tenants can remain in the homes for up to 120 days or until the end of their leases, Rowe said.
Tracey Cotten and her three children sleep at the Salvation Army homeless shelter near uptown. Cotten said they had lived in a house in Fayetteville until last spring, when the landlord lost the home to foreclosure.
The family had 10 days to move out when they learned about the foreclosure, she said. When she didn't find another place she could afford, she said police came to order them out.
“Everybody wanted so much money that I couldn't come up with at that time of the month,” Cotten said. “We were just walking around, bags in hand, nowhere to go.”
Tamika Shears, the woman who said she was evicted even though she never missed a rent payment, lived in the Peachtree Hills subdivision. Shears said she paid $1,100 monthly rent. Efforts to reach her former landlord were unsuccessful.
The neighborhood was racked by foreclosures. Of 147 homes, at least 42 have gone through foreclosure or been owned by a bank since 2003, according to county property records.
She eventually moved her family to another house, but said she remains upset because the landlord never contacted her about the foreclosure. Shears said she never received her $500 security deposit back.
She said that one day in April she received a call informing her she would soon have to move. A company put a for-sale sign in the yard the next day.