Tenants' Rights: What Tenants In Foreclosed Properties Need to Know

As part of a broader outreach initiative, the Executive Office of Housing and Economic Development and the Office of Consumer Affairs and Business Regulation have released a new brochure to alert tenants in foreclosed properties of their rights. The brochure directs tenants in foreclosed properties that aren’t properly maintained by lenders to call the state Consumer Hotline at (888) 283-3757.

Fannie Mae Announces Non-Eviction Policy for Renters in Foreclosed Properties

Efforts by New Haven Legal Assistance in Connecticut led Fannie Mae to announce plans to permanently stop evicting tenants from foreclosed properties.

The announcement, made by letter on December 14 and described in a Wall Street Journal article, follows a late November announcement by Fannie Mae that it would suspend both foreclosures and evictions until January 9. Freddie Mac has not announced similar plans, though it is reported to be reviewing its eviction policy.

On January 13, 2009, Fannie Mae announced the establishment of a new National Real Estate Owned (REO) Rental Policy that will allow qualified renters in Fannie Mae-owned foreclosed properties to stay in their homes. The current eviction suspension policy is in place through the end of January, which will allow for the new policy to be fully operationalized prior to the suspension concluding.

Freddie Mac Extends Eviction Suspension Until March, Launches Rental Option for Foreclosed Borrowers, Tenants

On January 30, 2009, Freddie Mac announced it is extending its suspension of evictions triggered by foreclosures on single family properties with Freddie Mac-owned mortgages through February 28, 2009. Freddie Mac is simultaneously launching a new strategy to offer qualified owner-occupants and tenants leases so they can rent the properties on a month-to-month basis after foreclosure.

Under the REO Rental Option, leases will be offered to current renters on a month-to-month basis at market rents or the rent amount they were paying prior to foreclosure, whichever is less. The rent for former owner-occupants will be the market rent, which will determined by the property management firm Freddie Mac contracted to manage the program.

To qualify, current tenants and former owner-occupants must be able to demonstrate they have adequate income to pay the monthly rental amount. The home must also meet applicable building codes, or can be affordably brought into compliance, to be eligible.