Here's the setup: A little over a year ago, one of the television news magazine shows did a story about traumatized homeowners renting a new home after theirs had been foreclosed. A few months after paying security deposit and monthly rent, the tenants are thrown out on the street by sheriff's deputies because the NEW home (the one they were renting) had also been foreclosed! Everybody cried, and Congress lept into action. We call that a "knee jerk" reaction. You know what that means. It means were are the jerks and we are getting the knee in the you-know-where. Congress passed the Protecting Tenants at Foreclosure Act. It's only about 3 pages long. It was intended to protect innocent tenants from being thrown out of rental homes after a foreclosure. As worded, it might be unconstitutional, and it is so vague and ill-considered that it effectively operates as a sledgehammer in the hands of well-informed borrowers and tenants, not as a shield. All the ambiguity affects the new owner after a foreclosure, and their rights and responsibilities. As a result, caution would dictate the new owner do NOTHING if a tenant is occupying the property, or the new owner should consider buying out the tenant. To read the entire Act, and my editorial comments, click HERE and scroll down to the bottom of the page for the link to Protecting Tenants at Foreclosure Act.
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- Tags: Banks and Other Lenders, federal, foreclosure, Foreclosures, landlord, Landlord Tenant, protecting tenants at foreclosure act, tenant