States act for renters caught in foreclosure trap

“My sheriff doesn’t wring his hands and gnash his teeth very long,” said Undersheriff James Gage. “He looks at the situation, sees it’s wrong and takes action.”

And last week, Ohio state Reps. Ted Celeste and Mike Foley, both Democrats, proposed the Ohio Renter’s Protection Act. The law would require landlords to tell potential tenants if the rental property is in foreclosure and notify current tenants of a foreclosure within 30 days of the filing. The bill also calls for 30-day notice to the tenant before a sheriff’s sale. It could reach a vote by the end of the year.

“You want to protect the tenant to the degree that they have some notice, should there be a need to have them leave,” Celeste said.

In July, California Gov. Arnold Schwarzenegger signed a law giving a tenant 60 days to leave a rental housing unit after the property is sold in foreclosure.

Illinois passed a measure in August that calls for 90 days’ notice before an eviction takes place — a law that apparently was not being followed too closely because Dart told a judge that his deputies were often evicting renters who had not been given proper notification.

When it comes to tenant laws and renter’s rights, each state has its own rules, and each state legislature is free to add further protections for tenants.

But there are no state or local laws in Miami to prevent the eviction of the Mendozas. They have asked a real estate agent to start planning for that possibility.

Other states — Indiana, Minnesota, Rhode Island and Washington — considered bills strengthening tenants’ rights in foreclosures, but they apparently died in their legislatures, according to the National Conference of State Legislatures.

In Michigan, a bill was introduced to require landlords to notify tenants at least 30 days before a property is put up for auction. But the measure has been in committee since last December.

Renters can forget help from the federal government, at least for now. The National Low Income Housing Coalition tried to get the government to spend $200 million for relocation assistance for renters who lose their homes to foreclosure, but the request didn’t make it into the big bailout of the financial industry.

Sheila Crowley, the coalition’s president, said she will continue to press the issue: “If we spent $700 billion, can’t we spend a chintzy $200 million?”

Also in msnbc.com business Open House: Homes for sale in a winter wonderland ConsumerMan: It's a ruby ... but it's not the real thing Answer Desk: TARP break even? Not very likely Companies look for alternatives to the holiday party   Video: $1 million home winner has to sell to pay taxes

MORE FROM MORTGAGE MESS

Mortgage Mess Section Front

BofA says it has modified 600,000 mortgages Mortgage delinquencies hit record high Pace of mortgage help rising but still slow No shame in walking away from mortgage Tips on getting feds to cut your house payment Newsweek: Why the FHA may need a bailout Mortgage delinquencies at a record high Low expectations for mortgage help program Treasury: Millions more foreclosures coming Mortgage applications surge as rates tumble Mortgage Mess Section Front   Add Mortgage Mess headlines to your news reader: