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Bill Would Stop Automatic Evictions for Renters After Foreclosure
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When a landlord goes into foreclosure, paying your rent on time is no protection from eviction. U.S. Senator Christopher Dodd and state lawmakers want banks to do more to keep renters in their homes.

In the last two years, seven private banks in Connecticut have evicted more than 1,500 renters during foreclosures. 

New Haven Legal Assistance says that's bad policy and wants them to stop the automatic evictions. Attorney Amy Eppler-Epstein says they not only kick out renters who aren't at fault, but can end up actually lowering property values.

"Neighborhoods and communities are being destabilized as lenders turn formerly occupied buildings into vacant, boarded up ones that become easy targets for theft and vandalism and other criminal activity."

A bill before the General Assembly's Housing Committee would prevent no-fault evictions during foreclosure, unless a bank can show property must be empty to sell. 

The federally controlled Fannie Mae and Freddie Mac have instituted moratoriums on evictions and plan to set up month-to-month leases so tenants can stay put.

Democratic Representative Tim O'Brien of New Britain says private banks should follow suit.

"I think that the banks have some responsibility to the people who are now bailing them out, and making sure that they do not break down communities is one of those responsibilities that they have."

The House and Senate chairmen of the Housing Committee say they intend to pass the bill.

U.S. Senator Christopher Dodd endorsed the state bill's intent. He chairs the Senate Banking Committee, but he says it's unlikely similar legislation could pass through Congress. 

The Obama administration's foreclosure plan does not include eviction protections for tenants, though it does call for $1.5 billion for moving assistance. 

Of course, when tenants are allowed to stay in foreclosed property, the bank becomes the landlord. The Connecticut Bankers Association did not immediately respond for comment on that potential new responsibility.