Paying multiple application fees before qualifying for housing is a significant hardship for low income and other hard to place individuals.  Low income housing advocates have long sought a portable background screening report to lessen the burden on this vulnerable population.

Under the "traditional" tenant screening model, applicants meet with prospective landlords, complete a rental application and pay an application (screening) fee.  The landlord orders a screening report from a consumer reporting agency (CRA).  The CRA returns the background screening report to the landlord, who then decides to accept (the applicant), accept conditionally (e.g. with an increased deposit or cosigner) or deny tenancy.  This process is hard on low-income individuals who may spend hundreds of dollars on application fees, paying multiple times for the same report, before finding a landlord who will accept them.  Once they do, they may lack the funds needed for fees, deposits and other move-in costs.  Additionally, the applicant has no legal right to a copy of background check unless the landlord takes adverse action (denies tenancy or attaches conditions - such as an additional deposit).

The effort to address multiple screening fees and portability dates back to the middle 90's.  More recently, in November 2008, the Spokane Low-Income Housing Consortium (SLIHC) assembled a working group of advocates and CRA's to explore the problem and consider solutions.  There were five tenant screening services represented. 

"We wanted to eliminate the practice of tenants having to pay for screening report after screening report and then not having money for security deposits or first months rent," said Cindy Algeo, SLIHC's executive director.  "It was becoming a barrier to obtaining housing."

After numerous conversations, one company, Seattle-based Moco Incorporated, took the initiative to create the industry’s first direct-to-consumer (portable) tenant screening report.  Moco, Incorporated Vice President Paul Prudente said the report, which puts prospective tenants in control of their own background checks, is the first of its kind.  "It turns the traditional tenant screening model on its head," Prudente said.  The new product is marketed under the name MyScreeningReport.com® and is available at www.MyScreeningReport.com. 

Under the applicant initiated tenant screening model, the applicant orders, receives, reviews, disputes (if necessary) and, finally, shares the tenant screening report with the prospective landlord - in that order.  Under this model, the applicant: 

*      Pays a single screening fee. (payable by credit, debit or gift card)

*      Disputes errors (if any) before the report is share (by them) with the landlord.

*      Reviews the content of the screening report with prospective landlords to determine whether they qualify under the landlord's rental criteria before paying application fees, deposits, etc.

*      Has the information they need to better manage their affairs.

Note that consumer initiated screening reports do not create an inquiry on the credit report and, therefore, do not impact the applicant's credit score.

The new product is a win for private landlords as well, many of whom lack access to quality tenant screening services due to the cost associated with certifying landlords under the traditional model.  Landlord certification is not required under the applicant initiated screening model.  Further, this model expedites the leasing process by giving landlords the information they need when first meeting with prospective tenants.  Tenant screening fees are collected directly from applicants - eliminating the hassle associated with collecting and managing these funds.

For more information or details about this consumer initiated screening report, email info@MyScreeningReport.com or visit www.MyScreeningReport.com.  MyScreeningReport.com® is a service of Moco Incorporated.

posted @ Friday, October 14, 2011 3:18 PM | Feedback (0)

Economic conditions have taken a toll on many prospective residents and increased the risk of default on lease obligations.  The natural tension landlords experience between leasing and background screening is heightened by those same economic conditions. 

Finding the proper balance between occupancy (leasing) and vetting prospective residents is critical under these conditions.  This is especially true for private landlords who tend to be more vulnerable to damage caused by problem tenants and who may lack access to quality screening reports. 

Knowledge is key to successfully navigating these waters.  Tenant screening products empower landlords to qualify more (not fewer) applicants by providing the information necessary to accurately assess risk and establish terms.  Comprehensive tenant screening reports include:

*      Credit Reports:  The devil is in the detail.  Landlords cannot afford to either approve or decline based on score alone.  Derogatory credit may or may not signal increased risk.  A large percentage of bankruptcies, for example, are associated with medical debt.  Those same individuals are often excellent rental risks.  Rental collections or eviction judgments, on the other hand, are clearly red flags.  The detail also reveals positive or negative trends. 

*      Eviction Records Search:  The majority of unlawful detainer (eviction) filings are dropped prior to judgment (for economic reasons).  So relying on the judgment section of the credit report alone is simply not adequate.  A thorough search of all names (including AKA's) and jurisdictions is a critical component of quality tenant screening reports.  A failure to search AKA's and additional jurisdictions as part of the background screening process will result in under-reporting by as much as 50%.

*      Criminal Records Search:  Criminal background checks should examine all names and jurisdictions, and include court records, department of corrections and sex offender registry data.

*      Records Matching:  Common names represent a significant challenge when it comes to criminal and eviction searches.  Evictions records are especially challenging since they include relatively few identifiers.  Name match alone is simply not enough.  Your tenant screening company should do the leg-work necessary to positively match criminal and eviction records returned to the applicant. 

*      Rental References:  Rental references are a critical component of the tenant screening process.  Rent payment history is a big deal and is not generally reflected in the credit report.  Eviction actions (more importantly the reasons for those actions) which have not yet reached the courts will likely surface during reference calls.  The key is to develop a specific list of questions which do not violate fair housing law and seek only objective responses.  Whether you make the calls yourself or outsource them to your tenant screening company, reference calls are crucial to the landlord screening process.

Traditionally, landlords (end-users as described by the Fair Credit Reporting Act - FCRA) undergo an extensive certification process prior to being authorized to order and receive tenant screening reports.  The cost and inconvenience associated with the certification process makes it difficult for private landlords to gain access to quality screening reports. 

Applicant initiated screening products (also known as direct-to-consumer screening reports) solve this problem by putting the applicant in control of their own information.  The applicant orders a background check on themselves and then shares the report with the landlord or landlords of their choice.  This model has several additional benefits.  First of all, the applicant is able to dispute information they believe is being reported in error prior to any impact on their search for housing.  Secondly, the transparency inherent in this process demands that the consumer reporting agency "...follow reasonable procedures to assure maximum possible accuracy..." of the information.  Further, applicants can review their screening report with prospective landlords to determine whether they qualify prior to paying an application fee or holding deposit - saving time and money for all concerned. 

Visit MyScreeningReport.com® (a service of Moco Inc) for more information about direct-to-consumer tenant screening products.

posted @ Friday, October 14, 2011 1:49 PM | Feedback (0)