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Dodd-Frank Reform Bill Includes Extension of Protecting Tenants at Foreclosure Act, Additional Housing Provisions
Washington, DC – The National Low Income Housing Coalition applauds the expected enactment of the Dodd-Frank Wall Street Reform and Consumer Protections Act (H.R. 4173), which has passed the House and Senate and is likely to be signed by President Obama this week. While the bill’s financial reform and consumer-protection provisions have been well documented, the act also includes housing provisions important to low income households and communities.
The bill will extend the Protecting Tenants at Foreclosure Act (PTFA) through the end of 2014. One of NLIHC’s highest policy priorities, the PTFA provides renters whose landlords have lost their properties to foreclosure the right to stay in the home for 90 days after the foreclosure or through the term of their lease. Under PTFA, housing choice voucher holders are offered similar protections. The Dodd-Frank bill also clarifies that any lease or tenancy created prior to the change of title as a result of foreclosure is protected by PTFA.
PTFA was first enacted in May of 2009. NLIHC championed PTFA after its analysis of foreclosure data showed that as many as 40% of the families affected by foreclosure are renters. These families often have no idea that their landlord has fallen behind on the mortgage, and have usually continued to pay their rent even as their landlord has failed to make mortgage payments. Before PTFA, the rights of tenants at foreclosure were governed by state law. In most states, such tenants received little or no notice before they were forced to move.
H.R. 4173 also requires the HUD Secretary to develop a program to refinance troubled multifamily mortgages. A growing number of multifamily buildings are facing foreclosure, the combined result of inflated mortgage costs and financially strapped renter households.
Renters are often the overlooked victims of the mortgage crisis. Because renters tend to have lower incomes than homeowners, their loss of home due to foreclosure is more likely to lead to homelessness.
“NLIHC commends Chairman Christopher Dodd (D-CT) and Chairman Barney Frank (D-MA) on their work to enact the Wall Street reform bill,” said NLIHC President Sheila Crowley. “The extension of PTFA is a critical step in making sure that low income families who are at risk of ending up on the streets through no fault of their own are able to keep their homes. Further, addressing the growing multifamily foreclosure rate shows a keen understanding that it is not just homeowners who are losing their homes to foreclosure.”