Wednesday, June 30, 2010

California Attorney General Announces Investigation into Banks’ Treatment of Tenants after Foreclosure

Since launching our Tenant Foreclosure Hotline we have counseled over 4,000 tenants in foreclosure situations. Most of the callers to our hotline report being harassed and mislead by post-foreclosure landlords and their agents.

I’m happy to report that, at the urging of housing advocates, California’s Attorney General, Jerri Brown has launched an investigation to ensure compliance with tenant-protection laws by banks and private investors acquiring tenant-occupied, foreclosed properties. The investigation, announced this week, comes after Tenants Together and 20 allied housing rights and public interest groups from across California brought rampant violations of tenant protection laws to the attention of the Attorney General. The coalition urged Attorney General Brown to take action in response to a pattern of illegal conduct and tenant harassment by banks, real estate agents, and lawyers in their treatment of tenants after foreclosure.

“Tenants who live in properties in foreclosure are the forgotten victims of the collapse of the housing market,” Attorney General Brown said. “We’ll fight every step of the way to ensure they aren’t rousted from their homes in violation of the law.”

The Attorney General’s press release provides further detail on the demands to the industry:

As a part of his investigation, Brown today sent letters to 24 banks, loan servicers, private investors, and law firms demanding information about whether they are complying with federal, state, and local laws regarding foreclosed properties and their treatment of tenants… In his letter, Attorney General Brown requires banks, loan servicers, private investors and law firms to provide information by July 19 about their policies and procedures when dealing with foreclosed properties and current tenants. It specifically asks the recipients to outline how they ‘promote or preserve tenancies after foreclosure.’

We will continue to monitor the Attorney General’s investigation and report on its progress.

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