A landlord who defaults on a mortgage knows months in advance that the bank will eventually foreclose. Renters most likely get the news at the last possible minute, usually when an eviction notice drops through the mail slot. And in most states, a bank that forecloses can legally empty the building and padlock the front door.
This system punishes blameless tenants and puts them at risk of homelessness. It also undercuts property values as foreclosed buildings - and in some cases entire neighborhoods - become magnets for squatters, addicts and criminals.
With foreclosures across the country reaching record levels, Congress should do more to keep buildings continuously occupied and to give renters protection. Renters make up about 40 percent of all families affected by the foreclosure crisis.
Renters in buildings that are foreclosed by Fannie Mae and Freddie Mac, the mortgage giants that were taken over by the government last year, are already protected from unfair eviction. In addition, the federal Neighborhood Stabilization Program, which was included in the stimulus package, requires states, localities and nonprofits that use federal dollars to buy foreclosed buildings to allow tenants to live out valid leases. The new owners must also accept Section 8 housing vouchers from existing Section 8 tenants and provide 90 days notice before eviction.
This is all to the good. But the vast majority of delinquent mortgages are not owned by Fannie and Freddie. They are owned by banks that have no obligation to treat renters fairly.
Representative Keith Ellison, a Democrat of Minnesota, has introduced a bill that would extend sensible protections to all renters. In addition to requiring a 90-day notice before eviction, the bill would permit renters to remain in their residences through the terms of their leases, except when the new owner plans to occupy the property as a primary residence.
This legislation would be good for renting families, which have been unfairly penalized by this crisis. It would also help to stabilize heavily foreclosed neighborhoods by keeping buildings occupied and alive in areas that might otherwise become ghost towns.
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