According to the state's largest organization of rental property owners, the California Apartment Association, a quarter of all foreclosed single-family residences are occupied by renters. That means a lot of residents throughout Los Angeles are being evicted these days. This "shadow market" of renters makes up 60% of the residents in Los Angeles alone. And even one of our own here at ATLA has felt the effects of an eviction recently, so this issue strikes close to home...
And it's not just California suffering. The New York Times reports "in Nevada, which has one of the highest foreclosure rates in the country, 28 percent of mortgages that were in default earlier this year were for homes not owner-occupied, more than twice the national average." Arizona and Florida are also experiencing similar renters' issues.
In light of this growing issue, the House recently passed a comprehensive mortgage act that would umbrella protect renters. The act would require new owners to continue the leases of tenants for up to six months after foreclosure, giving fair time for new housing arrangements to be made upon eviction notice being given. Currently, most state or local laws do not provide this protection, and under California law, existing rental agreements are essentially wiped out when a property is foreclosed. The only requirement is that a tenant be given at least 30 days' notice that he or she is being evicted.
More details about this growing local and national issue here.
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