Governments are stepping in to protect renters who find themselves evicted when the property they rent is foreclosed.
A new law passed by the California Legislature gives renters a 120-day grace period before they must vacate a foreclosed property.
A city ordinance in Chicago that will take effect Nov. 5 requires that tenants be informed within seven days of the foreclosure filing. The resulting proceeding can take months, so tenants who are informed promptly have plenty of time to find a new home.
The Illinois Mortgage Bankers Association expressed concern about any policy that allows tenants to stay after the foreclosure proceedings begin. They said that tenants in residence could make it difficult for buyers to get financing.
Dustin Hobbs of the California Mortgage Bankers Association says there have been similar restrictions in California for years and banks still lend. “The sky hasn’t fallen here.â€
Source: USA Today, Alan Gomez