A new law is being looked at in Washington which would allow borrowers of homes in foreclosure to remain in their current home, not as owners but as tenants. The “Right to Rent Act of 2010” or HR 5028 would do exactly this. The bill is designed to assist middle income famalies who are facing foreclosures on their curent homes. In short the bill would allow a homeowner to petition the courts to allow them to stay in the home at fair market rent as tenants. The “fair market rent” would be determined by a court appointed appraiser. There are also other qualifications for this law: the borrowers must have lived in the home for the past two years as a primary residence, they must have acquired this loan prior to July 1, 2007, the home must have been purchase with in the median home value in its market as determined by the National Association of Realtors. In addition, the borrower would have to petition the court for the right to rent within 25 business days from receiving their foreclosure notice.
This law is aimed at assisting middle class homeowners in foreclosure. Their monthly expenses would be decreased allowing them to regain a foot hold on their finances, in addition the real estate market would be assisted by keeping vacancy ratios lower than anticipated. The lenders are also expected to be encouraged to be more likely to perform loan modifications in order to avoid becoming landlords.
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South Florida Brokers & Associates, Inc.