Foreclosing Lenders Continue Giving Tenants The Boot In Violation Of Federal Law

CNNMoney reports:

• Renting a home that is going through foreclosure? If so, don't be fooled: Lenders can't kick you out; they have to honor the terms of your lease.(1) Of course, that doesn't mean that some lenders' representatives aren't trying to scare people away.

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• [T]enant advocacy groups charge that lender representatives, including some unscrupulous real estate agents, have been preying on tenants' ignorance. They pressure renters by sending them misleading letters that drive some out. One letter sent out by a Texas law firm stated, "This letter constitutes formal and final demand that you vacate the premises within three days [emphasis ours] of the date this letter is delivered." Worse, the message threatens legal costs if tenants don't comply. With that facing them, many fold their tents. "The average person wouldn't know the law has changed," said Robert Doggett, an attorney for Texas RioGrande Legal Aid. "People assume they have to leave."

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• [M]any [foreclosing lenders] often contract with outside companies -- law firms and real estate brokers -- to handle the [eviction] workload. And in some cases it may be those contractors who are overstepping the bounds, without the banks' knowledge, according to Gabe Treves, program director at California advocacy group Tenants Together. "The realtors see tenants as a roadblock to their commission," he said, "so they bully and mislead them into signing away their rights to say in their homes."

For more, see Your landlord got foreclosed. Do you have to go?

For national news coverage on tenants being bullied out of their homes after foreclosure, see Renters Can Stay Until Their Lease Is Up.

(1) Under the Protecting Tenants at Foreclosure Act, which Congress passed last May, tenants are usually eligible to stay after the property has been foreclosed as long as they have a valid lease and are paying their rent regularly. Even renters on a month-to-month lease get 90 days to leave.