Patti Vickman of the Oshkosh Area School District shared the recent "Spotlight on Poverty Update." An article in the latest issue that may be of interest to coalition members is titled "Facing Eviction: Protecting Tenants Living in Foreclosed Properties", by Geraldine Doetzer, Housing Attorney, National Law Center on Homelessness & Poverty
Read the full article here, or scroll to the bottom of this post for a link to a printable version of this article.
Beverly was doing everything right. A Cincinnati resident, she paid her rent on time and thought of herself as a good tenant and neighbor. It wasn’t until she returned home after a weekend with family to discover that she was locked out that she realized something was very wrong.*
Over the next few days, Beverly learned that her building had been foreclosed upon and had to hire a lawyer to regain access to her own apartment. Once inside, she discovered that the new owners had disposed of all of her belongings, from furniture to personal effects.
Through no fault of her own, Beverly was suddenly homeless.
What she may not have known is how common her story has become. Despite media focus on suburban homeowners and subprime speculators, 40 percent of families facing eviction due to foreclosure are renters, and 7 million households living on very low incomes (31 - 50 percent of Area Median Income) are at risk of foreclosure.
The catastrophe of a foreclosure can be even more devastating for tenants, who are both more likely to be poor and almost entirely at the mercy of their landlords for information.
Between 2007 and 2008 there was a 3.8 percent increase in the share of families that moved from living in a rental situation to living in a homeless shelter, according to the Department of Housing and Urban Development’s (HUD’s) 2008 Annual Homelessness Assessment Report to Congress. This large increase may reflect the effect of the foreclosure crisis on renters.
Even if a tenant can determine a property’s successor, it is often a large financial institution with little interest or expertise in managing property. The former landlord typically disappears, leaving utility bills but taking the security deposit.
Until last year, tenants like Beverly had almost no legal protections because, in 49 states, leases terminated at foreclosure. In response to advocacy by the National Law Center on Homelessness & Poverty (the Law Center—where I am the Housing Attorney) and other groups, President Obama signed the Protecting Tenants at Foreclosure Act (PTFA) in May 2009.
The PTFA is the first law to grant federal protections to tenants living in foreclosed properties, including the right to receive a minimum of 90 days’ notice before being required to leave the property. In most cases, tenants have the right to remain in their homes until the end of their leases.
While these protections are vitally important, the PTFA is hardly perfect. At the federal level, no single body is responsible for implementation or enforcement. Although HUD, the Office of the Comptroller of the Currency (OCC), and the Federal Reserve have all issued guidance, the alphabet soup of overlapping federal agencies adds to the chaos of an already muddled process.
A year after its enactment, tenants around the country are mired in litigation with lenders over violations ranging from blatantly illegal evictions to inaccurate notices and fishy "cash for keys" deals. Meanwhile, owners often fail to communicate with tenants, an information vacuum that goes hand-in-hand with poor building maintenance.
In June, the Law Center released Staying Home: The Rights of Renters Living in Foreclosed Properties, a report detailing laws passed at both the federal and state levels to protect these tenants’ rights since February 2009. Since then, 16 states have passed new laws relating to tenants at foreclosure. States from Maryland to Missouri clarified the timing and content of the notice, while a handful of legislatures recognized the quality-of-life issues that spring up during foreclosure. New York now requires that the successor-in-interest continue to maintain the property, while Maine and Wisconsin allow tenants to withhold rent if the property is not adequately maintained.
The Law Center applauds these actions, but there is much to be done before all tenants are adequately protected. HUD, the Departments of Veterans Affairs and the Treasury, and other federal agencies must establish a uniform system to track and respond to violations. Regulatory bodies like the OCC have a responsibility to monitor banks, while the Federal Trade Commission (FTC) has the scope and authority to take action against non-bank actors. Needless to say, banks and other businesses involved in the foreclosure process have a responsibility to educate themselves about the law and adequately self-police.
State legislatures must enact new laws, or pass pending legislation, to affirmatively expand the PTFA. Particularly important are laws that would clarify and expand the notice requirements, so that tenants are promptly notified that their homes are subject to foreclosure but that they do not have to move immediately. State attorneys general should target those at odds with the law with cease and desist actions or litigation.
Finally, advocates can expand efforts to educate tenants, landlords, and housing court judges about the PTFA and relevant state laws. Because illegal evictions often happen quickly, it is important to identify and reach out to vulnerable populations as soon as possible. Grassroots advocates should consider forming statewide coalitions to better facilitate these efforts.
Most urgently, Congress must make the PTFA permanent. The law is set to expire on December 31, 2012. With no possibility of a meaningful economic recovery by that date, many renters will be facing an even worse environment without the basic rights provided by the PTFA. Lawmakers must not ignore the millions of tenants whose homes are at risk through no fault of their own.
Geraldine Doetzer is the Housing Attorney at the National Law Center on Homelessness & Poverty.
*Name has been changed to protect the individual’s privacy.
Download a printable version of this article here.
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