Protecting Tenants from the Foreclosure Crisis

A tenant who is unlucky enough to live in a building that gets foreclosed upon will usually be forced out once the bank owns the property. In 2009, President Obama signed the “Protecting Tenants at Foreclosure Act” (PTFA) which allows tenants to stay in the property for at least 90 days or until the end of their lease. However, after passage of PTFA, many banks and real estate agents ignored the new law and continued to push tenants out right away. Earlier this year, after attorneys from New Haven Legal Assistance and Connecticut’s other legal aid programs reported the illegal evictions to his office, Attorney General Richard Blumenthal issued cease-and-desist letters to 30 companies that continued to violate the PTFA.  Since then, we have continued to monitor PTFA compliance. As the foreclosure crisis deepens, and neighborhoods continue to fill up with empty bank-owned properties, we are still working to help tenants like Robin and Marilyn stay in their apartments.

In Robin’s case, I had filed some paperwork with the court to try and stop her eviction based on her receiving help from the federal Section 8 program. Being on Section 8 actually gives a tenant some additional legal protections, but in this case Section 8 was also trying to force Robin to move. The bank had refused to sign a new lease and accept the Section 8 assistance, and under the program’s rules a tenant can’t go more than 6 months without Section 8 making a payment. So Robin was not only facing eviction, but was being threatened with getting cut off of the Section 8 program unless she moved!  I persuaded the realtor who was managing the property for the bank to make the repairs needed to pass the Section 8 inspection, and to sign the Section 8 paperwork to let Robin stay. Now the eviction case has been dismissed, her Section 8 is no longer in jeopardy, and everything is in process to get the apartment inspected and the bank leased up with Section 8.

Marilyn was not completely against moving because she uses a wheelchair and her house is not very wheelchair accessible.  But she didn’t want to be rushed into an even worse situation; and didn’t want to have to move during the winter.  Her landlord had a HUD mortgage, and HUD has a lot of complicated rules about when it will let a tenant stay after a foreclosure. I filed the necessary paperwork and medical documentation asking HUD to let her stay due to her disability. The HUD/bank lawyers kept trying to get her to accept a “cash for keys” offer to move out; and she was going to take it, if she could find a suitable place.  Then Marilyn found a person who wants to buy the building, install a ramp, and let her stay!  She’s thrilled, and I’ve negotiated with the HUD attorneys to pursue this sale instead of paying her to move out. 

The best recent success story is about a tenant who did not need our help after all. Last month, I got a referral for a post-foreclosure eviction case that had already been to court. Then I learned that the housing court Judge, on his own, had already decided to throw out the case because it didn’t properly comply with the new federal law and state eviction law. It is great that our education work in the courts has paid off, and now the Judges know what to look for even in cases where legal aid is not representing the tenant.