Before the foreclosure crisis hit its peak, housing advocates started noticing a pervasive trend impacting renters living in mortgaged properties. Even though they paid rent on time, each month, tenants were being evicted – and with just a few days notice – because the place they called home went through foreclosure.
Most renters didn’t know their landlords had defaulted on their mortgages, advocates found, despite receiving a monthly rental income. But under the “first in time, first in right” property rule, a lease signed after a mortgage was obtained is voided once that mortgage is foreclosed. The new property owners, be it a bank or an average Joe, could evict without prudence.
But in 2009, the federal Protecting Tenants at Foreclosure Act (PTFA) was enacted, granting tenants the right to live out their lease or at least 90 days’ notice before having to vacate. However, housing advocates fear these protections will no longer exist if PTFA expires on Dec. 31, when it’s due to sunset.
On March 10, Senator Sherrod Brown (D-OH) held a news conference in Cleveland to rally support for the Permanently Protecting Tenants at Foreclosure Act of 2013, which, if passed, would extend PTFA’s benefits indefinitely, as well as add a private right to action provision. Introduced by Senator Richard Blumenthal (D-CT), the proposed bill currently has five cosponsors, while its House companion has 24 – none of whom are Republicans.
Read the rest of my The Consumer Eagle article here.