Maryland tenants have rights when occupying foreclosured property
More Maryland renters caught up in foreclosure mess
Lenders and agents are seeking rapid evictions despite new state and federal laws passed to protect tenants. More Maryland renters are finding a sheriff’s notice on their door telling them to get out in 10 days or be evicted.
State and Federal laws require adequate notice
Maryland law requires that lenders notify renters before foreclosing on landlords, but the letters do not always get into the right hands.
Federal law requires that lenders or auction buyers taking possession of foreclosures give tenants at least 90 days’ notice before requiring them to leave, and longer in some cases – but too often that is not happening, advocates say.
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“There’s just a very severe lack of understanding of the rights that renters have,” said Matt Hill, staff attorney at the nonprofit Public Justice Center in Baltimore, which has been focusing on the issue. “We really have to get the word out. People can be easily confused and misled.”
Foreclosure might seem like a homeowner problem. But in the wake of the bursting of the real estate bubble and the lax lending practices that helped cause it, a great deal of collateral damage has been done to people who have no mortgage.
Nearly 40-percent of Baltimore properties in foreclosure occupied by tenants
In Baltimore alone, 1,900 of the approximately 5,000 properties that started the foreclosure process during the 12 months that ended June 30 were occupied by renters, according to the Baltimore Homeownership Preservation Coalition. That is nearly 40 percent. Each case represents at least one person faced with an unplanned move, probably without getting a security deposit back.
Maryland state hotline set up to help renters
A state hot line for renters whose landlords are in foreclosure, set up in mid-May, has averaged nearly 600 calls a month – without any marketing. The number, 877-775-0357, is included in the letter that lenders must send to Maryland homes whose owners are in default. Operators provide the numbers of legal aid groups and point callers toward the state’s apartment listing site, MDHousingSearch.org.
“In June, it was like somebody turned on a faucet,” said Bill Ariano, deputy director of the Community Development Administration at the state Department of Housing and Community Development. “This wasn’t a slow ramp-up.”
Some tenants, by not paying their rent, are contributing to their landlords’ foreclosure. But nine out of 10 renters who have called the state hot line said they were not behind on rent, and most said they had never been behind. The preceding rise in home prices drew a lot of inexperienced landlords into the metro area – the city in particular – as well as buyers who became accidental landlords when the housing slump foiled their plans to sell.
“The majority of the calls we get, they paid their landlord, they have proof they paid their landlord, and they’re upset because the landlord didn’t take care of their mortgage,” said Stephanie D. Cornish, program manager for the tenant-landlord counseling department at Baltimore Neighborhoods Inc.
Required notices sent to tenants are still troubling
Hill, who helped organize a conference in Baltimore this month to educate attorneys and advocates about renters’ rights in foreclosure situations, is finding that tenants who receive the required notices aren’t getting good information.
A notice sent to a client in September, for instance, said the lender would be starting eviction proceedings without giving a timeline or mentioning the protections under federal law. The law allows renters with leases to stay longer than 90 days if they have more time left on their contract, except in cases where properties are purchased by people who intend to move in themselves.
David T. Rammler, director of government relations for the National Housing Law Project, has received complaints from across the country that lenders or law firms and real estate agents representing them are violating the law. When pressed by an informed renter, he said, some “simply inform the tenant that ‘the law doesn’t apply in this state.’ ” In some states, local law had required only three days’ notice, he said.
“Ninety days is better than three,” Rammler said. “It’s a dramatic difference, and it represents a minimal level of civility that should be required in an enlightened society.”
Lack of communication directly from lender a complicating factor
A complicating factor is that lenders usually do not communicate directly with renters in the foreclosed properties, said Danna Fischer, legislative director of the National Low Income Housing Coalition. They have an army of contractors handling that job for them.
“You could have people dealing with tenants that are two or three steps away from the actual entity that holds title after foreclosure,” she said.
Real estate agents, for instance. Walter Molony, a spokesman for the National Association of Realtors, said the trade group has informed members about the federal law. “One of the problems we find broadly – and it’s not just with this issue – is a lot of regulations don’t make it down to the street level. It’s challenging for people on the street to stay on top of everything.”
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Source: http://www.baltimoresun.com/business/real-estate/bal-bz.rentersdec30,0,5055866.story
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