Honestly, I am very strict regarding the credit report. I would be wary of a prospective tenant that is unable or not paying their mortgage.
However, not every Landlord is as strict as I am and considering the situation in South Florida, if they are too strict, they may have no one to rent to.
I would be upfront with your situation that you were making all your payments including your mortgage on time and your bank was unwilling to work with you and take you seriously until started to default on your mortgage payments.
If that does happen, make the mortgage payments "to yourself" and keep it in your savings account. You can show the prospective Landlord that you had the money to pay the mortgage and set it aside to do so but the bank would not work with you. And now you have the money as a cushion to make sure that the monthly rent will definitely be paid. Show them documentation where you tried to work with the bank and where they stated that you were not a priority because you were paid up to date.
If a prospective tenant comes to me and he not only has defaulted on his mortgage (which is usually his largest expense) AND has otherwise spent the money that should have gone to the payment, has no emergency savings, still has major debt and is living paycheck to paycheck, that is a BIG sign to me that they can not afford to pay me rent on time.
However, if they were in a situation where they had no choice because of the red tape with the bank but HAD the money for the monthly payment and could show it accumulating in the bank, some Landlords may be understanding of the situation and take that into account.
You have to show that you are a good risk as a tenant. Many Landlords will see the mortgage default and pass. You have to market yourself. Go prepared with all the canceled checks for all your TIMELY mortgage payments for X months, a statement of when and why you stopped payments, documentation showing that you tried to work with your bank and that they refused to do so, bank statements showing that you set aside the money that BELONGED to the bank if they had been willing to work with you that you now had available with any other EF savings to ensure that you can pay your rent in full and on time each and every month, income statements, and anything else you feel will make the Landlord willing to take a risk to rent to you.
Good luck.
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