Great news for renters facing eviction due to foreclosure: any mortgage owner seeking assistance under Congress’ mammoth bailout bill is required to let paying renters stay in their homes.
Let’s dive into the text and see what renter protections Congress cooked up:
SEC. 109. FORECLOSURE MITIGATION EFFORTS.
(b) Coordination- The Secretary shall coordinate with the Corporation, the Board (with respect to any mortgage or mortgage-backed securities or pool of securities held, owned, or controlled by or on behalf of a Federal reserve bank, as provided in section 110(a)(1)(C)), the Federal Housing Finance Agency, the Secretary of Housing and Urban Development, and other Federal Government entities that hold troubled assets to attempt to identify opportunities for the acquisition of classes of troubled assets that will improve the ability of the Secretary to improve the loan modification and restructuring process and, where permissible, to permit bona fide tenants who are current on their rent to remain in their homes under the terms of the lease. In the case of a mortgage on a residential rental property, the plan required under this section shall include protecting Federal, State, and local rental subsidies and protections, and ensuring any modification takes into account the need for operating funds to maintain decent and safe conditions at the property.
Renters are explicitly allowed to keep any legal rental subsidies, so even if grandma’s nine-room penthouse Park Avenue suite is foreclosed, she can keep her rent-controlled rate of $32 per month.
SEC. 110. ASSISTANCE TO HOMEOWNERS.
(b) Homeowner Assistance by Agencies-
(3) TENANT PROTECTIONS- In the case of mortgages on residential rental properties, modifications made under paragraph (1) shall ensure–
(A) the continuation of any existing Federal, State, and local rental subsidies and protections; and
(B) that modifications take into account the need for operating funds to maintain decent and safe conditions at the property.
The bailout bill is full of goodies to help keep people stay in their homes. If you’re facing eviction, read our post explaining the bailout bill, and then immediately call your local HUD office to discuss your options.
Text of H.R. 1424: Emergency Economic Stabilization Act of 2008 [GovTrack]
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