House Keeping Report-

Another troubling foreclosure practice has come to light in Oregon. Lenders are using common law writs of assistance to avoid the post-foreclosure eviction process and summarily remove tenants in derogation of both state and federal laws.

State and Federal Law Protects Tenants From Summary Eviction Post-Foreclosure

Writs of assistance are creatures of common law arising from a court’s equitable powers. In the foreclosure context, writs of assistance are often used to secure the assistance of a sheriff in removing a foreclosed homeowner who refuses to leave after the sale.

Tenants, unlike owners, generally have a right to remain in the possession of the property for a period of time after the sale. Congress passed the Protecting Tenants at Foreclosure Act (PTFA) in 2009. The PTFA allows tenants with a “bona fide” lease to remain in possession of the property for the greater of 90 days after foreclosure or the remainder of the lease term. A lease is “bona fide” if (1) the tenant is not the spouse, child, or parent of the homeowner; (2) the lease resulted from an arm’s-length transaction; and (3) the rent is not substantially less than fair market value. Under the PTFA, the immediate successor-in-interest to the property (i.e., the purchaser at the foreclosure sale) takes subject to the bona fide lease.

[HOUSE KEEPING REPORT]

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