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Tuesday, March 23, 2010

Many renters unaware of foreclosure rights

Many renters unaware of foreclosure rights

Last year witnessed a record number of foreclosure filings, with 2.8 million properties receiving either a default notice, scheduled foreclosure auction or bank repossession.

Despite keeping up on their payments, renters are often affected by their landlord's financial fallbacks. A federal law was passed last year to protect the rights of these individuals. The 2009 Protecting Tenants at Foreclosure Act requires that lenders give at least 90 days' notice following a foreclosure sale's "redemption period" before evicting them from a property.

Still, many renters facing foreclosure have given up their rights because they are not aware of the law, according to a recent report by the Detroit News. One such individual is Rebecca Papiez, whose landlord told her she had 30 days to vacate the property she shared with her three children and quadriplegic husband.

After meeting with a housing assistance group, the Warren, Michigan, resident realized she had significantly more time to relocate.

State law affords few rights for Michigan homeowners facing possible foreclosure, according to Jim Schaafsma, a housing attorney at Michigan Poverty Law Progam.

"It's great for Michigan that there's this federal law that offers them some protection, but it's of little value if they don't know about it," he was quoted as saying.

The state accounted for 2.61 percent of the nation's total foreclosure filings in 2009, according to data from RealyTrac.

Renters are an often overlooked, but significant, part of the population affected by such filings, according to the Detroit News report. United Community Housing Coalition executive director Ted Phillips told the newspaper that one-third of his clients are renters of foreclosed properties.

A Detroit-based pilot program, Retaining Occupancy On Foreclosure, is also aimed at keeping these individuals inside their homes. Launched last fall, ROOF extends the amount of time renters may remain in their property following the six-month redemption period and 90 days provided by federal law.

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