Renters and foreclosures
Renters are using short term loans to help with the loss of their homes. Since the recession, many homes have fallen into foreclosure and a lot of those homes have renters living in them. These renters are in difficult situations, not knowing when to leave, what the procedure is or what to do. Now a new federal law has been enacted that offers renters protection from eviction if the property they are renting is lost in a foreclosure.
The Protecting Tenants at Foreclosure Act
A Federal Reserve release reads, “The fundamental purpose of The Protecting Tenants at Foreclosure Act is to ensure that tenants facing eviction from a foreclosed property have adequate time to find alternative housing. To that end, the law establishes a minimum time period that the tenant can remain in the foreclosed property before eviction.”
The National Low Income Housing Coalition, or NLIHC, estimates that about 40% of houses in foreclosure have renters in them. NLIHC President Sheila Crowley stated, “This bill brings long overdue relief for the most blameless victims of the foreclosure crisis—the families who, after paying their rent each month, are suddenly told they must move out of the homes because their landlords have been foreclosed on.”
How the new law works
The Protecting Tenants at Foreclosure Act gives renters with existing leases the ability to stay in their homes until the leases terminate. The only way an existing lease can be altered is if the property is purchased by new owners who plan to use the home as their primary residence. In that case, the renter is still allotted 90 days to vacate the property, and the law overrides the lease termination date. Crowley added, “There are stresses when the home you are renting is going into foreclosure and most people have budgetary issues that won’t allow them to immediately relocate.”
How renters are managing
Increasingly, families that have to relocate rely on short term loans, family help, and savings to facilitate the move. Howard Gregory of Plainfield, Illinois said, “It was hard when we had to move, but having financial resources was what kept us hopeful for a solution.” Industry experts are cautioning every renter to have some emergency fund to fall back on. It is imperative that they have the means to act quickly if need be.
The Protecting Tenants at Foreclosure Act also helps tenants who do not have existing leases. According to the new law, they still have 90 days to manage their move. This gives them enough time to search, move and get settled before any evictions proceedings even start. That’s good news to the millions of Americans who are renting. It’s a way for them to manage a difficult situation.
The future of renters and foreclosures
The numbers speak for themselves. Foreclosures are rampant in the US market today. It is estimated that more than 60% of homes in Las Vegas, for example, are foreclosures. That means many renters may have difficult times ahead of them. They may need savings or short term loans to fund moves. With the Protecting Tenants at Foreclosure Act, however, things should be a little easier.