A foreclosure can be a personal tragedy for homeowners, and it can be hard to recover from a foreclosure if you have already lost your job or are facing other financial hardships. According to the San Francisco Chronicle, Congressmen Gary Miller and Joe Donnelly introduced the Neighborhood Preservation Act in August 2009.
The bill would allow federally-regulated banks and lenders to negotiate leases with a homeowner who has just lost their home in a foreclosure. These leases could last for as long as 5 years, and banks would also have the freedom to enter into lease-to-purchase agreements so homeowners could conceivably repurchase their house.
However, the bill does not require banks or lenders to give this option to foreclosed homeowners, so it would be a voluntary program. This program would also depend on the assumption that the homeowner has the money to pay rent – something that would be determined by the bank.
While some critics agree that renting is a way for homeowners in foreclosure to stay in their homes, they wonder if the banks should be in control of this program. The Neighborhood Preservation Act still needs to be approved by the Senate in order to become law.
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