Homelessness Law Blog

An important aspect of Wall Street reform is the creation of a new Consumer Financial Protection Bureau, which will take charge of nearly all federal consumer protection regulation – including regulation of mortgages, student loans, credit cards, and other financial products.  The new Bureau might even be able to help us spread the word about the Protecting Tenants at Foreclosure Act (PTFA).

Why does the Bureau matter to people concerned about ending homelessness?  Well, what helped kick-start the financial crisis?  The push for universal homeownership, which led to the issuance of risky subprime mortgages.  And once home values plunged, many Americans found themselves held prisoner by crippling consumer debt.  The new Bureau can’t make those debts disappear, but it will be able to write fair rules that help give low income families the chance to stay financially stable, and avoid homelessness.

President Obama is now faced with a decision on who to appoint as the Bureau’s new director.  It should be Harvard Law Professor Elizabeth Warren, who is currently heading up the Congressional Oversight Panel tasked with overseeing implementation of TARP.  In that role, she has been a passionate advocate for helping homeowners avoid foreclosure, unafraid to criticize the actions of an Administration that she supports as too little, too late.  The new Bureau was Warren’s idea, and she worked closely on the legislation with consumer and affordable housing groups.  She knows what PTFA is, and why it’s important.  And finally, she’s got the Jon Stewart seal of approval.

- Jeremy Rosen, Policy Director

Yesterday, the Senate passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, sweeping legislation that covers a broad range of financial and housing policy issues. The House had already passed the same bill on June 29. President Obama is expected to sign the legislation into law during the week of July 19. The Act contains several key provisions of importance to homeless and low income Americans.

Of particular note is an extension and clarification of the Protecting Tenants at Foreclosure Act (PTFA), which ensures that renters whose properties go into foreclosure – through no fault of their own – receive adequate notice so they can find new homes. The Law Center helped spur the passage of PTFA last year and has since been advocating for its extension past the original sunset date of 2012. Dodd-Frank extends it to 2014.

To read more about PTFA, see our commentary in the Spotlight on Poverty and Opportunity.

The bill also provides new funding for foreclosure prevention measures and efforts to help rebuild housing in blighted communities. Read more about these provisions here.

Today we celebrate these significant victories for housing advocates and the American people!

Photo credit: carlossg

It’s no secret that the foreclosure crisis has had a tremendous impact on the United States. In 2008, state and local homeless groups reported a 61 percent rise in homelessness since the beginning of the foreclosure crisis. But what may surprise you is that 40 percent of families facing foreclosure-related eviction are not owners, but renters.  Worse, 7 million households living on extremely low incomes are presently at risk of foreclosure.

Thanks in part to a report issued by the Law Center and the National Low Income Housing Coalition at the beginning of 2009, the federal government and a number of states have taken action.  The Protecting Tenants at Foreclosure Act (PTFA) was signed into law by President Obama in May of last year, and it affords tenants unprecedented federal protections – including the right to 90-days notice prior to eviction or, in many cases, the right to stay in their home until the end of their lease.

But as the law will eventually expire and does not negate state law when it offers renters better protections, it’s important that steps be taken at the state level too.  We’re happy to report progress on that front!  Since the release of our 2009 report, 16 states have enacted new renters’ rights laws, and 21 states have proposed legislation pending.  This helps fill gaps in PTFA’s protections, and assures security for renters in the long-term, in the event that PTFA is not renewed past its 2012 sunset.

There’s still a lot to be done, though.  As you’ll discover in our new report, Staying Home: The Rights of Renters Living in Foreclosed Properties, renters’ rights are being violated across the country.  New property owners (often banks) are many times failing to inform or misleading renters about their rights, or even illegally evicting them.  Federal and state regulators must get more involved to curb these trends, exercising their oversight of banks and, when appropriate, litigating to ensure compliance with the law.

To read our new report, click here. Please circulate it widely.

-Andy Beres, Grant Writer/Communications Assistant

Photo credit: respres