“What are we gonna do?” says Deborah Jones, Cleveland resident and mother of three. “It’s crazy and I mean hilarious.” The edge in her voice becomes more apparent. “This has affected me real bad. My parents got sick and I moved to be closer to them. I wasn’t living in my house for more than two months and these people started telling me that I was gonna have to move because the house was in foreclosure. We had three days to find a new place to live, so I borrowed money from Peter, Paul, Mary and Jane, just to be able to move into another property.”
As it turns out, after one year of living in the second place, Deborah Jones and her family faced a second foreclosure…not as owners, but as tenants. The owners of the property had not paid their mortgage for two years. After the water was turned off, the Jones family had three days to find a new place to live, with no resources to make it happen.
While the impact of foreclosure on individual homeowners is receiving much attention, a tragic story that remains largely untold is that of renters—and most importantly, the people like Ms. Jones who are at the end of a long chain of fiscal irresponsibility from predatory and sub-prime lending practices.
Bill Faith knows this story well. He is Executive Director of the Coalition on Homelessness and Housing in Ohio (COHHIO). “We are seeing rental properties, mostly four-plexes and duplexes that are ending up in foreclosure,” says Faith. “The people who own these properties are mostly smaller investors who often had little equity to begin with when they purchased their small investment property.”
As a result of dramatic changes in the housing market, many property owners have built little equity and find themselves in a situation where there is a gross disconnect between the amount owed and the value of the home. While notice is supposed to be given to the renters of these properties, it is possible to have multiple foreclosure filings before any notice. Because tenants are not named in foreclosure cases, they do not seem to exist in the eyes of the court. Properties are sold back to the banks, which have no interest in being landlords. Then tenants like Ms. Jones face three days notice.
“While foreclosure prevention programs do exist, these programs are not available to the tenants of foreclosed properties, and the tenants in every case, end up paying dearly for something they had no part in creating,” explains Faith, who tries to stay hopeful that positive solutions are on the horizon.
State Representative Ted Celeste of the 24th district has introduced Bill 626 in the Ohio legislature, which would require at least two months notice for tenants of foreclosed properties. The impetus for this bill came directly from conversations with constituents who face eviction as a result of foreclosure on rental properties.
Another organization working to create transparency in an otherwise confusing and complicated process is the Cleveland Tenants Organization. Executive Director Mike Piepsny explains that they are currently assisting 15,000 people a year who are facing eviction as a result of foreclosure. The Cleveland Tenants Organization works with Case Western Reserve University to cross reference foreclosure data with U.S. Census data in order to locate tenants whose properties are in foreclosure. This enables the group to send letters to tenants giving them as much as a one year notice that they will have to move. The organization also offers tenants limited legal and financial assistance.
“Housing is a basic human need,” says Bill Faith. “Your entire life declines or improves as a result of the stability of your home. I have always believed in following my passion and this seemed like an issue that I could really put my heart into. And I’ve had enough victories to keep going.”
According to the research group Policy Matters, 30% of foreclosures in the Cleveland area affect rental properties. As we face that stark reality, it is critical that people and programs continue to create small victories to help people like Deborah Jones make it through these very difficult times.