On April 14, 2011, a the following bill was introduced in the House of Representatives by Rep. Raul Grijalva [D-AZ7]:
Grants eligible mortgagors subject to foreclosure proceedings the right to continue to occupy foreclosed properties subject to the payment of fair market rent for a period of five years that begins upon the commencement of occupancy of such property. Instructs the Secretary of Housing and Urban Development (HUD) to: (1) monitor compliance with this Act, (2) provide assistance to eligible mortgagors in exercising their rights under this Act, and (3) conduct outreach activities to inform eligible mortgagors of this Act.
This bill is now in committee.
The bill does not preclude a bank (creditor) holding the mortgage from foreclosing on the property. However, it appears that the bill would allow the owner/renter to obtain tenant rights in the event of a foreclosure sale, dependent upon the lease terms.
Is this a good idea?
Although lenders may have not appreciated the pervasiveness of the foreclosure crisis early on, if this bill were enacted during the early stages of the recession, maybe bank bailouts would have been unnecessary, or limited.
On the same note, neighborhoods may have been saved from blight and depreciating housing prices affecting contiguous homes.
Moreover, property owners facing foreclosure may have been provided the opportunity to get back on track.
Who knows.
Our country is rapidly moving in the direction of a rental society. And, if congress eliminates the mortgage interest deduction, home ownership may be a thing of the past.
