Thursday, May 14, 2009
Renters Unwittingly Caught in Foreclosure Crisis
SENATOR WANTS BANKS TO GIVE 90 DAYS TO VACATE
By Conor Greene
Among the victims of the nation’s foreclosure crisis are renters who lose their home because the property owner fell behind on the mortgage payments.
Under the current law, these tenants are often given just ten days to move out, despite having paid the rent each month – something that State Senator Jeff Klein is hoping to change through a tenant notification bill. The law, which would require banks to give tenants 90 days to move out, was approved in the Senate by a vote of 37-25, and is pending in the Assembly.
“Tenants who pay their rent on time deserve better than to find themselves on the other end of a notice to evict in 10 days without any prior knowledge that their homes have been foreclosed on, through no fault of their own” said Klein (D-Bronx). “If we don’t stem the tide and protect the innocent victims of this crisis – the renters – they will be the new face of homelessness in New York City.”
Across the five boroughs, an average of 581 renters are evicted each month, and the Center for Housing Policy estimates that almost 20% of all foreclosures are rental properties. Due to fallout from the housing crisis, states including Ohio, Illinois, Minnesota, Maryland, Rhode Island, Michigan and California have also instigated stronger notification requirements to protect unwitting renters from becoming evicted without sufficient notice.
The numbers are particularly stark in Queens, which has been hit especially hard by the foreclosure crisis. There were 311 tenant eviction cases in the borough in April, compared to 101 in Brooklyn, 49 in the Bronx, 69 in Staten Island and 4 in Manhattan. Since December, there have been 1,789 tenants evicted due to foreclosures in Queens, accounting for more than half of the 2,907 total cases of tenants evicted citywide.
The new legislation stipulates that after taking possession of a home, the bank must notify tenants that they have no less than 90 days to vacate the foreclosed home. The bank or new property owner would also have to file proof that it provided the tenant of its intent to evict them. Currently, many renters are unaware that their homes have fallen into foreclosure until the bank assumes ownership after auction and provides the tenant a Notice to Petition for Holdover. Tenants must then move within 10 days under threat of a lawsuit.
“With much of the attention and focus on saving homeowners from losing their homes, thousands of renters have fallen through the cracks in the foreclosure crisis and are facing eviction with little or no notice, as well as bad marks on their credit histories which can prevent them from securing adequate housing for their families. This city’s hard working families deserve adequate notice and time to make life altering decisions.”
As part of his study, Klein also released a snapshot showing the top five banks responsible for evictions in New York City. Deutsche Bank, which received $11.8 billion in federal bailout funds, evicted residents 689 between December 2008 and April 2009.
“It is unconscionable for a financial institution accessing federal bailout money to be so unrelenting in evicting people from their homes,” said Lionel Ouellette, executive director of CHANGER, a non-profit housing group based in the city. “In order to avoid an even greater public health epidemic, foreclosure related evictions and foreclosure cases must come to a halt and financial institutions must engage in more aggressive loan modifications that include principal write downs.”
Klein speaks in support of legislation to protect renters who are immediately evicted once the property owner defaults on the loan. He is joined by City Councilman Thomas White (D-Jamaica), whose district has been hit particularly hard by the foreclosure crisis, and renter Lisa Brown, who was forced out of her Long Island rental home when the bank foreclosed on the property.
The Forum Newsgroup/photo courtesy of WILLIAM ALATRISTE
Subscribe to: Post Comments (Atom)
By knowing your local real estate investing market, you're able to keep your finger on the pulse of your local community and to stay abreast of changes in trends, sales prices and rental rates. Knowing immediately about these changes is critical to your investing future.
Post a Comment