Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
@Federico Peralta correct me if I'm wrong but it was just criminal checks I believe. The good news is that if someone has a record and is going to be a problem in the present their credit and/or income to rent ratio probably isn't going to be great either.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
@Federico Peralta correct me if I'm wrong but it was just criminal checks I believe. The good news is that if someone has a record and is going to be a problem in the present their credit and/or income to rent ratio probably isn't going to be great either.
Rental Property Investor · San Francisco, CA · Member since 2015 · 236 posts · 156 votes
6y
@Federico Peralta, I believe this would deter investors from investing in Oakland? Do others see this and other measures like rent control as opportunities to invest as this may scare away other investors leaving more properties available?
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
6y
For whatever it is worth, the mortgage industry ALREADY doesn't do general criminal background checks. I've done a bunch of mortgages for the formerly incarcerated; we don't document it anywhere in the loan file (so there's no good stats on it), but they disclose it to me in the form of "hey Chris I have a record, I did [crime here], is that going to be a problem?"
The thinking is...
For the formerly incarcerated likely to have issues making payments, it'll be reflected in the other existing criteria.
For the formerly incarcerated not likely to have issues, they will meet all the other existing criteria.
Think about it. 2 convicted drug dealers. One now has a job, can show paystubs, tax forms, has worked to re-build credit, etc. The other does not have any of this. Which of these two do we think is still dealing drugs? Do you REALLY think the drug dealer stacking $100 bills is going to also punch a clock for 40 hours a week at the hourly rate they are able to get as someone with a criminal background? No.
And I'm not saying that to imply anything about the incomes of the folks with criminal backgrounds, a lot of the folks with income sufficient to qualify end up self employed in some capacity, higher income than area median income (and in my case it's Bay Area median incomes we're talking about). They used to hustle drugs or stolen cars, now they hustle non-stolen cars, or landscaping services, or plumbing, etc. Still a hustle. Same skill set, just no longer moving goods and services that are illegal, they hung out with some white collar criminals (the thing about prison is it's full of criminals, what else is there to learn but what other types of crime and criminals there are?!) and figured out that you don't NEED to be breaking the law to make decent money. The fact that he's out there doing landscaping and reporting his income on taxes, PROBABLY means he's not ALSO stacking $100 bills from drug deals, there's no need to do landscaping if you are, and MOST people only have mental/emotional capacity for a single entrepreneurial type thing at a time.
Not going to necessarily offer my personal opinion on this new policy, but I don't think it's as crazy as folks think. Fun fact: A formerly incarcerated person might not meet your criteria as landlord to rent a unit to them in the lower income area of your town, so instead they purchase the home (since we don't do background checks) right next door to you and are your neighbor in the nicer part of town, watching your kids play in the yard, etc... whoops, might not have considered that one. :P A VERY common motivation for a formerly incarcerated person to be calling me for a mortgage, is because they can't find anywhere to rent, I'll actually probably lose business because of the new policy.