Renters, too, are losing their homes because of the subprime mortgage crisis, although the route from foreclosure to the street is a little more circuitous for renters than it is for homeowners who live in the houses they are about to lose.
Real estate fever snared buyers of duplexes, triplexes and other rental properties; many defaulted when their mortgage rates were adjusted upward. Now banks and other financial institutions are collecting the rent and answering tenant complaints.
That's bad news all around. Tenants who never missed a rent payment lose their homes and, in this high-demand rental market, can't find new ones. Lenders hold properties that produce no revenue to cover taxes or maintenance. Neighborhoods bear new signs of blight in the form of empty or abandoned buildings, and there are fewer residents around to patronize local stores or keep an eye on things.
The Times is generally wary of restrictions on landlords, but City Council President Eric Garcetti's proposed moratorium on evictions of tenants from foreclosed buildings is a good idea.
It borrows eviction protections and procedures from the city's rent-stabilization ordinance, and that may make some property-rights advocates nervous. But it shouldn't. The use of those procedures would not convert post-1978 buildings into rent-controlled buildings.
Garcetti's tenant protection ordinance is still being drafted, but when it comes before the housing committee next week, members should be certain it does nothing to make it harder for the accidental property owner to sell to any prospective buyer. That means the eviction protections must lapse as soon as the property is sold.
Meanwhile, the council should consider other common-sense protections for tenants caught up in the mortgage mess, such as mandatory notification when foreclosure proceedings are pending against their building.
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