To protect the interests of bona fide tenants in the case of any foreclosure on any dwelling or residential real property, and for other purposes.

SA 1036. Mr. KERRY (for himself, Mrs. Gillibrand, Mr. Reid, Mr. Dodd,
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 a
federally-related mortgage loan or 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 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.
(c) Definition.--For purposes of this section, the term
``federally-related mortgage loan'' has the same meaning as
in section 3 of the Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2602).

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 federally-
related mortgage loan (as that term is defined in section 3
of the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2602)) or 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.''.

SEC. 504. SUNSET.

This title, and any amendments made by this title are
repealed, and the requirements under this title shall
terminate, on December 31, 2012.
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