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The Foreclosure Crisis Affecting Renters
In Philadelphia a sixty seven year old great grandmother became an unexpected victim of the foreclosure crisis. The elderly woman signed a lease to rent a corner house and expected to have a nice place to live until she could enter a senior citizens’ community. She was surprised when she found a notice on the door advising her that the house was in foreclosure. Even though the landlord told her that the problem would be taken care of the woman was told she had to leave.
A growing number of renters are being caught up in the country’s current foreclosure crisis. According to the current statistics, almost two million foreclosures have been filed in the nation so far this year. This is an enormous increase from last year.
If a landlord rents out a home or other property and is facing foreclosure, the tenant may not be allowed to stay on the property. Also neither the landlord nor the bank is legally obligated to let the tenant know about the foreclosure. Most of the time, the renter is told about the foreclosure when the party is being told to leave the property.
No one knows how many tenants are finding themselves in this situation. This unfortunate situation is occurring in middle class and poor neighborhoods. The problem is occurring in suburbs, cities and even some rural areas. High end neighborhoods are not as affected as many other neighborhoods because these neighborhoods have not been experiencing the foreclosure problem in the numbers that lower and middle class neighborhoods are.
Many times, tenants who are on a fixed income and who are evicted on short notice may have a lot of trouble finding another place to live and they may not have the finances for the move. A tenant may have trouble coming up with the security deposit for a new place to live and they may never get back the security deposit from the foreclosed landlord. Some people have continued to pay the landlord rent even though the landlord does not own the property anymore.
Sometimes lenders will offer a tenant “cash for keys”. This means they agree to give the tenant an amount of money if they will move out in a certain time period. However, these incentives are useless because the amount of money is small and it doesn’t help the problem. The renter is forced out quickly and pushed into market they may not know how to navigate.
A bill passed through Congress at the end of last year that gives tenants faced with eviction due to foreclosure to six months to leave but the bill may not become law.
Lenders do not agree with a law that would make them become landlords. Though the Mortgage Banker Association dislike the fact that a tenant faces eviction due to foreclosure but they do not agree with forcing requirements onto lenders would be very burdensome. It would be burdensome because lenders do not have the knowledge or ability to be affective landlords.
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My landlords property is in foreclosure. He has decided he is not going to save it and he has not paid the mortgage for the past 4 months even though I have paid my rent to him through June. The notice of default was filed on May 16,2008 which means he can actually stay until the property goes to sale but has informed me that he is going to be out by July 17th and that we need to move by then that he is turning off all the utilities on that date and locking the place up. He has not even served us with an eviction notice or given us a 30 day notice in writing. What can I do to prevent him from doing this?