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Ellison's Bill to Protect Renters in Foreclosed Homes

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By : John Cutts    99 or more times read
Since 2007, Minnesota foreclosed homes has been spreading rapidly in the state, leaving hundreds of families homeless and devastating communities.

A report by international investment bank Credit Suisse showed that nearly 16 percent of troubled loans will result into foreclosed homes by 2012. A case for example is Hennepin County, Minnesota where the number of foreclosed homes surged by almost 32 percent in 2008.

To address the growing foreclosure crisis in the state, Representative Keith Ellison has introduced the Protecting Tenants at Foreclosure Act of 2009. The renter protection legislation aims to protect tenants of foreclosed homes.

Ellison pointed out that just like homeowners, renters in foreclosed homes also bear the brunt of the economic and foreclosure crises.

Not all local and state laws provide basic protections to renters and as a result, many of tenants in foreclosed homes can be forced out without any notice.

A National Law Center on Homelessness and Poverty report indicated that only 17 states mandated that landlords of repo homes should give notice to renters prior to eviction. Meanwhile, only 12 states required that renters should be involved in the foreclosure process before the termination of their lease.

Under Minnesota law, landlords of foreclosure homes are required to give a two-month notification to their renters.

Ellison pointed out that the flood of Minnesota foreclosures has devastated families and neighborhoods and the extent of the crisis reached renters in foreclosure properties owned by distressed landlords.

He said that hardworking homeowners who never violated any rule should not be made to suffer the consequence of the current crisis, adding that it is unfair to evict them from their properties without any warning.

The Minnesota foreclosure crisis reflects the current predicament of the countryís housing market.

Nationwide, mortgage delinquencies and loans in foreclosure increased by 11 percent during the last quarter of 2008, according to the Mortgage Bankers Associationís National Delinquency Report. The number of mortgage loans one month behind in their payments and on the brink of foreclosure also increased by 8 percent for the same quarter. The figures represented a 13 percent increase compared to the third quarter of last year.

Meanwhile, the bill introduced by Ellison would create a standard rule to protect renters in repo homes. The bill would require a 90-day notification to tenants prior to eviction. It would also displace expansive protections stipulated under local or state laws.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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