Homeowners across the country are likely aware of what may be at stake if they fall behind on their mortgage payments. They know that if they can no longer make these payments on their home, they can face the possibility of foreclosure. This process can be devastating for New Jersey homeowners who may already be struggling with debt. But it is important to remember that foreclosures can also have a significant impact on renters as well.
In recent years, millions of families have opted to rent a home or apartment instead of buying one, especially during the housing crisis. However, a recent report indicated that 20 percent of all foreclosures in the past three years have been rental properties, and 40 percent of the people facing evictions due to foreclosures are renters, not homeowners.
Since 2009, renters in New Jersey and nationwide have been under the protection of the Protecting Tenants at Foreclosure Act. This act mandated that renters be entitled to stay in their homes for a period of time if the property goes into foreclosure. Unfortunately, without legislative action, this protection will end in 2014. This could mean that tenants could be evicted with little or no notice if the property goes into foreclosure. After a new person owns the property, they can simply evict anyone currently living there.
Few renters understand that they currently have this right to stay in their home for either 90 days or until the end of a lease if the property goes into foreclosure. Those in support of the current protection offered to renters argue that if the PTFA is allowed to expire, there will be a wave of people who will be evicted immediately and will be at risk of being without a home. Hopefully, congressional intervention will prevent this from happening before thousands of renters are faced with foreclosure and immediate eviction.
Source: The Huffington Post, “Renters At Risk In Foreclosure Crisis Rely On Short-Term Federal Law,” Lucia Graves, Dec. 17, 2012