Talk of the Town: Renters in Foreclosure

As you read on Wednesday, a law has been in place since 2009 protecting tenants when the building they live in goes into foreclosure.

According to some, this law, which is set to expire in 2014, has room for improvement and strengthening beyond just eliminating the expiration date.

While an Arizona court upheld the provisions of the Protecting Tenants at Foreclosure Act, reports have surfaced in some parts of the country suggesting that financial institutions and others do not always abide by the law.

NLIHC staff find that a significant number of those calling our offices in need of housing assistance call because their rental home has gone into foreclosure, and they need help understanding and exercising their rights. While we are still collecting data on these calls, anecdotal evidence suggests this is a persistent and perhaps growing problem.

So how do we solve it? What can organizations and institutions do to better spread the word about the laws protecting tenants? What kind of changes to the law could be made to strengthen it? What have you learned from seeing this law, or similar state or local laws, in action in your community? Let’s talk about it in the comments.

Comments

  1. Perhaps the biggest hurdle will be whether banks are preparing to become landlords. My guess is no.
    This crisis has shown that banks do only one thing well – lend money. They are horrific at collecting money, indeed they outsource that task to loan servicing companies. The banks have legal departments but hare terrible at prosecuting foreclosures and instead outsource all their meaningful legal work. Why should anyone believe a property owning bank will be a good landlord? They will likely outsource that task and fail to keep a watchful eye on the persons responsible for upkeep.
    In short, there will be major issues in the foreclosure to rental market but the laws will at a minimum keep roofs (even if leaky) over peoples heads.

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