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Renters Get New Protection From Foreclosure

Renters just scored a big win against foreclosure.

You might think renters don't have to worry about losing their homes to the bank. But many have been turned out onto the street--although they were current on their rent--because the landlord wasn't current with his mortgage payments. The National Low Income Housing Coalition estimates that 40 percent of the households that lose their homes to foreclosure are renters evicted after the bank takes the home from their landlord.

Renters now have more protection against losing their homes under the new foreclosure prevention bill President Obama signed into law yesterday.

Starting immediately, the law requires that tenants who pay their rent on time can remain in their home until the end of their lease, unless the bank sells the property to someone who intends to make it his own residence. Even without a lease, renters must be allowed to stay in their home for 90 days after the foreclosure. The provision is scheduled to expire at the end of 2012.

Jurisdictions that already have more stringent renter-protection laws in place won't see the rules loosened by the new federal law. The District, for example, already protects renters from being evicted during the term of their lease unless they fail to pay rent or provide another just cause for eviction. The National Law Center on Homelessness and Poverty has a state-by-state description of eviction and foreclosure laws on its Web site.

By Elizabeth Razzi  |  May 21, 2009; 6:00 AM ET
Categories:  Foreclosure  
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Comments

At the very least it will be interesting to see how this plays out. Unfortunately we feel that law makers have missed the boat again. Of the tenants we have talked to over the last year, the vast majority of them would rather have the option of ending their lease and finding more stable housing than being saddled with an unwilling landlord. Imagine the disruption of your life as you try to live in a property in foreclosure. The current landlord does not care about you as a tenant, how quick do you think the landlord is going to be when it comes to repairs or maintenance? There are constantly people coming to look at the property for the lender, real estate agents, appraisers, environmental specialists, investors. Then after all that the foreclosure is completed and the tenant has a new, even less enthusiastic, landlord. The new landlord, usually the bank, has no interest in being a landlord whatsoever! Their single goal is to get rid of the property which means the property goes on the market as soon as possible and more of the tenant's right to quite enjoyment goes out the window.

We applaud the administration’s efforts and we know that their intentions are good however lets think about giving tenants a choice in their own destiny instead of chaining them to a bad situation.

Renters can find out online if their landlord is in foreclosure at www.rentalforeclosure.com

Posted by: shawnshepherd | May 21, 2009 9:07 AM | Report abuse

A step in the right direction for protecting families and individuals who rent, however, an incomplete step. Renters who are locked into a lease with a landlord in foreclosure should be given the opportunity to exit the lease early in order to find a more stable long-term rental. My two cents. Mark; www.linkedin.com/in/markcoleman1

Posted by: mark631 | May 24, 2009 12:02 PM | Report abuse

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