NLIHC Study Highlights Plight of Renters in Market Going Through High Number of Foreclosures

By Anuradha Kher, Online News EditorWashington, D.C.–While there has been ample coverage on foreclosures and how they are affecting buyers, the impact of foreclosed homes on renters is often ignored.According to a new report, “Without Just Cause,” sponsored by the National Low Income Housing Coalition (NLIHC) and the National Law Center on Homelessness & Poverty (NLCHP), homelessness across the country is rising in the current market. The study, which has also received pro bono assistance from the law firm of WilmerHale, reveals that renters of foreclosed properties are among those most at risk of homelessness. The report outlines the rights, and lack thereof, for renters in foreclosure in all 50 states and the District of Columbia. About 40 percent of families facing eviction due to foreclosure are renters whose landlords have defaulted on their mortgages, and the renters have little protection. If a landlord is foreclosed upon, tenants who have paid their rent on time may face eviction without notice. Some local sheriffs, such as Sheriff Tom Dart of Cook County, Ill., made headlines recently for refusing to evict renters in these cases. The status of renters in foreclosure cases is a matter of state law, and laws are complex and vary among the 50 states and the District of Columbia. In practice, there are often even fewer protections: even if they have rights, many renters are often unaware of them, and few have easy access to lawyers, who may also be unaware of tenants’ rights. Major findings of this report show:Only 17 states require any type of notice to tenants. Only 14 states and D.C. require a judicial process for foreclosure. In several states, tenants may remain only if they are not named in the foreclosure proceeding. Only New Jersey and D.C. explicitly preserve tenants’ rights in the lease after foreclosure.  “This lack of protection for law-abiding renters can result in families losing their homes, children changing schools, and communities being destabilized unnecessarily,” says Danilo Pelletiere, NLIHC research director. “Renter protections are important to stopping the cycle of decline.”In response, NLIHC has called on Congress and the administration to provide:$10 billion for the National Housing Trust Fund over 2009-2010 to rehabilitate or build 100,000 rental homes for the lowest income households using green standards. $2 billion in Emergency Shelter Grants, for homelessness prevention and housing assistance to prevent low-income renter households from becoming homeless, and to rapidly re-house those that do lose their homes; 400,000 households would be assisted.   400,000 new housing vouchers over 2009-2010, which would assist another 400,000 low-income families afford modest rental housing.