FDIC Financial Institution Letter Outlines Protections Afforded to Tenants at Foreclosure

October 1st, 2009 by narcompany

The law amended the already existing HOPE for Homeowners Program, extended the temporary increase in deposit insurance coverage under the FDIC and National Credit Union Administration, and provided protection to certain tenants who face eviction because of a landlord’s default on a mortgage. The FDIC has issued a Financial Institution Letter advising lenders of the provisions of the Act that relate to the protection of tenants. (Division A-Title VII, Protecting Tenants at Foreclosure Act) Under these provisions, all tenants must receive a 90-day notice before being evicted. With some exceptions, tenants with existing leases are entitled to remain on the property until the end of the lease’s term. The letter also sets forth information concerning exemptions from this requirement, the interplay with state law, and the FDIC’s enforcement of the Act’s provisions.

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