While the country focuses on the plight of homeowners facing foreclosure, the plight of renters forced to move due to foreclosure has received too little attention.
Under Texas law a tenant can be forced to move out of a foreclosed property after the foreclosure agent provides them a mere 30 days notice. If a family has rented a house, put down all of the security deposits and utility deposits and enrolled their kids in school it is grossly unfair to force them to move out on 30 days notice despite the fact that they have a valid lease agreement for a much longer term. Most of these borrowers also lose their security deposits in the foreclosure process.
Robert Doggett, testifying earlier this summer before the Texas House Financial Institutions Committee asked for the law to be changed to require the lease be honored for a longer time period after foreclosure.
Several recent studies have indicated a significantly higher proportion of renters are being affected by foreclosure, estimating that upwards of one in three foreclosures involve rental units. An Ohio study found rental foreclosure filings represented nearly 30 percent of all residential property foreclosure filings in 2007.
Last month the National Low Income Housing Coalition (NLIHC) released the results of the survey of 329 HUD-approved housing counseling agencies. The survey found…
…the majority of our survey respondents (51%) reported that renters evicted by foreclosure typically have less than one month to secure a new home. Counselors have seen post-eviction outcomes that run the gamut, from renting a unit in the same community to homelessness.
Recent federal initiatives have provided financial assistance directed at helping homeowners facing foreclosure. There is also a need for some immediate help for the renters who are victims of foreclosure.