Helping Families Save Their Homes
In May, President Obama signed into law the Helping Families Save Their Homes Act of 2009. This law includes several provisions to help distressed homeowners. We've heard about short sales and foreclosures and while there is still much to discuss about these and how they affect the homeowners...let's talk for a minute about what happens to a person or a family that might be renting a home owned by an investor that's being foreclosed on.
While the market was hot, investors were buying properties like crazy to have as rental properties. Many investors leveraged these properties greatly and are being affected like many of the traditional homeowners by the downturn in the market. When one of these properties is affected by a short sale or is being foreclosed on, what happens to the occupants and the lease they have signed? After all, they are paying the rent every month just as they are supposed to. Do they have any rights or protection in this situation?
Absolutely yes. Although many prior to the new Act, in effect as of May, were evicted, now there is some relief. Now, lenders who foreclose on rental properties must allow the tenants to occupy the property until the end of the lease term. If a buyer purchases a rental property and intends to occupy the home as his or her primary residence, the new owner must give the tenant at least 90 days notice before forcing the tenant to leave.