The financial reform bill is giving renters a new lease on life, especially for those living in foreclosed homes.
Rarely has it been more chic to shed the burden of a mortgage and breathe the rarifying air of the home renter. The vibes about renting are so strong they’re spilling over into the financial reform bill.
The U.S. homeownership rate is already down 2% from 2006 to 2010 (69% of adults versus 71%, according to the Federal Reserve). But the Fed expects that rate to accelerate to 5% in the next five years, which means there will be more renters and fewer homeowners in the U.S. for at least half a decade.
Maybe that’s why politicians sought to prop up renters in a key provision of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act, otherwise known as the financial reform bill.
The legislation extends the Protecting Tenants at Foreclosure Act (PTFA) through the end of 2014, and seeks to protect renters who are living in foreclosed homes. Under the old rules, tenants living on foreclosed properties could stay in the home for 90 days from the day the property officially fell into foreclosure, or when a “foreclosure” notice came to the property owner.
Now with the extension, renters have 90 days from the day the foreclosed property is actually sold — that is, the day buy and sell papers change hands and the deal is legally recorded. As the law states, “the date of a notice of foreclosure shall be deemed to be the date on which complete title to a property is transferred to a successor entity or person as a result of an order of a court or pursuant to provisions in a mortgage, deed of trust or security deed.’’
The legislation also allows a homeowner to lease the home to a renter, even as the property enters into foreclosure (but hasn’t been sold).