FEDERAL GOVERNMENT NO LONGER PROTECTING TENANTS POST FORECLOSURE.

FEDERAL GOVERNMENT NOT PROTECTING TENANTS POST FORECLOSURE.

The Protecting Tenants at Foreclosure Act (PTFA) expired last December.  The Act allowed tenants to stay in the property at least 90 days after it was foreclosed.  Should it make a comeback?   There is a proposal in Congress to make it permanent.  Lenders disliked the law as it forced them to be a landlord and delayed the repossession process.  Under the old PTFA it was possible for the lender to be forced to honor a long term lease.  There were some unscrupulous people who fraudulently created long term leases. However, it was good because it created a national standard for dealing with tenants thus avoiding numerous state laws that have been adopted since the housing crisis.

What no one wants to talk about is that 1/4 of all mortgages still are at risk of foreclosure.  This means that in those states like Missouri who do not have laws to protect tenants there will be tenants who are evicted immediately after a foreclosure.

Bringing back the PTFA in some form would give the public more confidence in the lending industry.  On a national level it would show that lenders are not callous, not cold and calculating.  There are lenders who still apply may provisions of the old PTFA on their own.  Lenders realize there are tenants who are unprotected.  These same lenders are not honoring long term leases, but they are allowing 90 days for the tenant to move.   These lenders are not just nice guys.  Lenders do not want a tenant on the news talking about how horrible the lender treated them.   So, today it is every lender for themselves.  Good luck tenants.

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