LAS VEGAS -- In the foreclosure crisis of 2007, thousands of American families are losing their homes without ever missing a payment.
They are renters in houses whose owners default on their mortgages - a large but little-noticed class of casualties. Some live in big apartments, others in houses owned by small investors who got in over their heads.
There are no exact figures for how many renters have been evicted because of foreclosures, but a survey taken earlier this year by the Mortgage Bankers Association found that one in eight foreclosures was non-owner-occupied. This figure probably underestimates the problem, according to the association, because buildings receive tax benefits if they are registered as owner-occupied. More than 1 million properties are expected to enter foreclosure this year.
Many renters say they never even knew their building was heading for foreclosure.
"This is an explosion," said Judith Liben, a lawyer at the Massachusetts Law Reform Institute. "This isn't business as usual. These are investors that overleveraged themselves, and the renters are collateral damage in the mortgage crisis."
Here in Nevada, which has one of the highest foreclosure rates in the country, 28 percent of mortgages that were in default earlier this year were for homes not owner-occupied, more than twice the national average, according to the Mortgage Bankers Association. Arizona and Florida, both leaders in foreclosures, are also well above the national average. In California, 22 percent of the properties lost to foreclosure this year were not owner-occupied, according to ForeclosureRadar.com, which tracks California foreclosure auctions.
Foreclosing lenders typically evict tenants so they can sell the property, said Vicki Vidal, senior director of loan administration and government affairs at the Mortgage Bankers Association.
"Banks don't want to be landlords," Vidal said. "They're in the business of making mortgages. You need to recoup the money to keep the process moving."
Unlike owners who lose their houses, renters do not stand to forfeit years of equity. And many can find comparable rentals.
Lara and Louie Northern, who live in a home that is in foreclosure in a new subdivision here, far from the Strip, say they have never been late on a rent payment. But each day in their four-bedroom house, they wonder whether this will be the day they get an eviction notice telling them they have 72 hours to leave the property.
Though the Northerns' lease runs until January 2009, a few weeks ago they packed all nonessential items in their garage - everything but clothes, linens, cookware and furniture - in case they have to leave in a hurry.
"It's not normal to live like this," said Louie Northern, 36, a mail carrier, standing amid empty bookshelves and bare walls. "And the worst part is not knowing if we're going to have a note on the door tonight, tomorrow or the next day."
The House on Thursday passed a broad mortgage act that includes protections for renters. The House act, which the lending industry has opposed, would require new owners to continue the leases of tenants for up to six months after foreclosure.
Sen. Christopher J. Dodd, a Connecticut Democrat who introduced similar legislation in the Senate, said in a statement, "A foreclosure doesn't differentiate between a homeowner and a renter residing in a defaulting property." Currently, most state or local laws do not provide this protection.
In a statement, the White House said it opposed a number of provisions in the House mortgage bill. But it did not threaten a veto and said, "The administration looks forward to working with Congress to address its concerns as the process moves forward."
Clark County, which includes Las Vegas, has been an epicenter of foreclosures, with nearly 30,000 defaults in the first nine months of this year, up from about 14,000 in the same period in 2006, according to the county recorder's office.
The county more than doubled in population since 1990, to nearly 2 million from 800,000. That growth, along with rising home prices, made it a magnet for speculators, including small investors who took advantage of low, teaser mortgage rates to buy rental properties for less than they would cost in California.
Homeless shelters in Las Vegas said they had not seen an influx of displaced renters. In St. Louis, Karen Wallensak, director of Catholic Charities Housing Resource Center, said that "about a dozen" displaced renters had come for help, though none had applied for a place in the organization's homeless shelters. "We've had calls from people literally as the sheriff is at the door changing the locks, and they had no idea they had to move," she said.
The pressure is particularly acute here because of the prevalence of small speculators and the high rate of foreclosure, exacerbated by a depressed market.
The House bill passed in Washington last week calls for new owners - usually lenders - to give tenants a 90-day notice before foreclosure, then continue leases for up to six months after. Renters without leases would have 90 days to leave the property. In Clark County, renters who receive federal housing subsidies and have valid leases continue their arrangement with the new owner. Others get three-day notices to vacate.