Protecting Tenants at Foreclosure - Federal …

1 Protecting Tenants at ForeclosureBackgroundThe Protecting Tenants at Foreclosure Act of 20091became effective on May 20, 2009. This new lawprotects Tenants from immediate eviction by per-sons or entities that become owners of residentialproperty through the Foreclosure process andextends additional protections for Tenants with of Housing an dUrban DevelopmentSection 8 law is self-executing; nofederal agency has authority to issue regulationsimplementing the law or to interpret the law. Thelaw expires on December 31, fundamental purpose of the ProtectingTenants at Foreclosure Act is to ensure that tenantsfacing eviction from a foreclose dproperty haveadequate time to find alternative housing. To thatend, the law establishes a minimum time periodthat a tenant can remain in a foreclose dpropertybefore eviction.

2 The law does not affect any state orlocal law that provides longer time periods or otheradditional protections for Fide Lease or TenancyA lease or tenancy is bona fide if the tenant is notthe mortgagor or the parent, spouse, or chil dof themortgagor; the lease or tenancy is the result of anarms-length transaction; an dthe lease or tenancyrequires rent that is not substantially lower than fairmarket rent or is reduced or subsidized due to afederal, state, or local the law, the immediate successor in interestat Foreclosure must (a) provide bona fide tenantswith 90 days notice prior to eviction and (b) allowbona fide Tenants with leases to occupy propertyuntil the en dof the lease term, except the lease canbe terminate don 90 days notice if the unit is sol dtoa purchaser who will occupy the Title VII of the Helping Families Save Their Homes Act of2009.

3 Public Law 111-22, effective May 20, 2009 ( ).2. #6 Consumer Compliance HandbookProtecting Tenants 1 (11/09) Protecting Tenants at ForeclosureExamination Objectives and ProceduresEXAMINATION OBJECTIVES1. To assess the institution s awareness of itsresponsibilities under the Protecting Tenants atForeclosure Act of To assess the institution s compliance manage-ment policies an dproce dures with respect to itsresponsibilities under the PROCEDURES1. Determine that the institution is aware of itsresponsibilities under the law through interviewswith institution Determine that the institution has incorporatedits compliance responsibilities under the law intoits operations, particularly with respect to itsforeclosure notice Determine that the institution has conductedtraining for appropriate personnel regarding Determine that the institution has incorporatedroutine reviews for compliance with the law intoits compliance monitoring Determine that the institution s internal auditprogram has been updated to include auditplans for evaluating compliance with the Review applicable compliance review an dau ditmaterials, including workpapers.

4 Checklists, andreports pertaining to the law. Evaluate whetherthe reviews an dau dits performe dwere reason-able an daccurate an dthat effective correctiveaction occurre din response to any i dentifie Summarize findings and supervisory actions needed to address any weak-nesses an d deficiencies in the institution scompliance management systems. Discuss find-ings with institution management an dobtain anynecessary commitment for corrective Compliance HandbookProtecting Tenants 3 (11/09)