S.Amdt. 1024

SA 1024. Mr. KERRY (for himself, Mrs. Boxer, Mrs. Gillibrand, and Mr.
Kennedy) submitted an amendment intended to be proposed to amendment SA
1018 submitted by Mr. Dodd (for himself and Mr. Shelby) to the bill S.
896, to prevent mortgage foreclosures and enhance mortgage credit
availability; which was ordered to lie on the table; as follows:

At the end of the amendment, add the following:

TITLE V--PROTECTING TENANTS AT FORECLOSURE ACT

SEC. 501. SHORT TITLE.

This title may be cited as the ``Protecting Tenants at
Foreclosure Act of 2009''.

SEC. 502. EFFECT OF FORECLOSURE ON PREEXISTING TENANCY.

(a) In General.--In the case of any foreclosure on any
dwelling or residential real property after the date of
enactment of this title, any immediate successor in interest
in such property pursuant to the foreclosure shall assume
such interest subject to--
(1) the provision, by such successor in interest of a
notice to vacate to any bona fide tenant at least 90 days
before the effective date of such notice; and
(2) the rights of any bona fide tenant, as of the date of
such notice of foreclosure--
(A) under any bona fide lease entered into before the
notice of foreclosure to occupy the premises until the end of
the remaining term of the lease, except that a successor in
interest may terminate a lease effective on the date of sale
of the unit to a purchaser who will occupy the unit as a
primary residence, subject to the receipt by the tenant of
the 90 day notice under paragraph (1); or
(B) without a lease or with a lease terminable at will
under State law, subject to the receipt by the tenant of the
90 day notice under subsection (1),

except that nothing under this section shall affect the
requirements for termination of any Federal- or State-
subsidized tenancy or of any State or local law that provides
longer time periods or other additional protections for
tenants.
(b) Bona Fide Lease or Tenancy.--For purposes of this
section, a lease or tenancy shall be considered bona fide
only if--
(1) the mortgagor under the contract is not the tenant;
(2) the lease or tenancy was the result of an arms-length
transaction; or
(3) the lease or tenancy requires the receipt of rent that
is not substantially less than fair market rent for the
property.

SEC. 503. EFFECT OF FORECLOSURE ON SECTION 8 TENANCIES.

Section 8(o)(7) of the United States Housing Act of 1937
(42 U.S.C. 1437f(o)(7)) is amended--
(1) by inserting before the semi-colon in subparagraph (C)
the following: ``and in the case of an owner who is an
immediate successor in interest pursuant to foreclosure--
``(i) during the initial term of the lease vacating the
property prior to sale shall not constitute other good cause;
and
``(ii) in subsequent lease terms, vacating the property
prior to sale may constitute good cause if the property is
unmarketable while occupied, or if such owner will occupy the
unit as a primary residence''; and
(2) by inserting at the end of subparagraph (F) the
following: ``In the case of any foreclosure on any
residential real property in which a recipient of assistance
under this subsection resides, the immediate successor in
interest in such property pursuant to the foreclosure shall
assume such interest subject to the lease between the prior
owner and the tenant and to the housing assistance payments
contract between the prior owner and the public housing
agency for the occupied unit, except that this provision and
the provisions related to foreclosure in subparagraph (C)
shall not shall not affect any State or local law that
provides longer time periods or other additional protections
for tenants.''.
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