Renters could get more rights against foreclosure-related evictions (Plain Dealer)

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Renters could get more rights against foreclosure-related evictions (Plain Dealer)

WASHINGTON, D.C. – To get evicted through foreclosure is dispiriting enough.  But to lose your house or apartment through foreclosure when you merely rented – and you paid your rent on time – ought to be permanently illegal, say Congress members who are pushing for permanent protections for renters.

U.S. Sen. Sherrod Brown brought the spotlight to that effort today at a Cleveland news conference. Brown is a cosponsor of a bill that would permanently extend the Protecting Tenants at Foreclosure Act of 2009, which gave temporary protection against eviction to families renting houses that went into foreclosure. These renters make up about 40 percent of occupants affected by foreclosure, according to Brown’s office and housing advocates.

“Tenants who work hard, and responsibly pay their rent each month, deserve protections for themselves and their families,” Brown said.

The problem is that they paid their rent to landlords who failed to make mortgage payments. The landlords pocketed the rent or spent it elsewhere, defaulting on their mortgages. Until 2009, if the houses were foreclosed upon and resold, almost always at a discount, the new owners could evict the tenants, often giving the renters no recourse and little notice to move. The new owners, including housing speculators hoping to profit on their bargain purchases, had other plans for the homes.

This happened so frequently that “two of my staffers who are single mothers had less than 30 days” to find new apartments, said Roslyn Quarto, executive director of Empowering and Strengthening Ohio’s People, or ESOP, a housing counseling group.

The 2009 law ended that by saying if the tenants had leases and were abiding by their terms, the new owners had to honor those leases. There was an exemption if the new owners intended to occupy the properties, but it required giving the tenants 90 days’ notice before eviction. The law had provisions to assure that these leases were legitimate and not ruses to let the previous owners or their relatives stay in the homes.  

That bill, whose bipartisan supporters included Dayton Republican Rep. Mike Turner, was supposed to expire in 2012 but the Dodd-Frank financial reforms of that year extended the protections to the end of 2014. Democratic lawmakers led by Sen. Richard Blumenthal of Connecticut and Rep. Keith Ellison of Minnesota late last year introduced bills to extend the protections permanently, and Brown joined Blumenthal as a cosponsor and talked up the bill this morning.

So far, no Republicans have signed on as co-sponsors. Groups such as ESOP and the National Low Income Housing Coalition say they cannot imagine why anyone would oppose permanently preserving tenants’ protections, since tenants would still be bound by their leases, providing rental income to the new owners. And the new owners still could kick out the tenants – after three months – if they really wanted to live in the homes.

But people familiar with the bill say that tenants would gain a new protection in the latest legislation that they currently don’t have: the explicit right to sue the new owners if they believed the owners violated the law. Tenants would have what is called a “right of action.” The current law allows tenants to complain to federal housing and lending authorities, which have found very few violations, but it gives the tenants no explicit right of their own other than a possible defense if they fight the eviction.

The new law would give them a clear right to sue.  That raises the possibility of more political opposition this time.

The prospect of a new right to sue could bother Republicans who have wanted to limit the number of lawsuits of all kinds and have pushed for tort reform, according to a House staffer familiar with the bill. Republicans hold a majority in the House, and Democrats control the Senate.

The bill would normally require hearings in the House and Senate financial services committees, but the House committee has been reluctant to take up legislation pursued by Democrats.

A spokesman for the House Financial Services Committee has not yet responded to a request for comment. Turner’s office has not yet responded to a question about whether he will cosponsor the newest bill.

Ohio was at the forefront of the foreclosure crisis that led to various housing reforms, and problems persist. In January, 9,748 properties in Cleveland were in some stage of foreclosure, according to the firm RealtyTrac. In Cuyahoga County, the foreclosure rate for January was one in every 622 housing units, and it was one in every 242 in Maple Heights.

Read it from the source.