Mr. Chairman, I have an amendment at the desk. Mr. Chairman, the amendment that I propose to the House today is twofold. The first part deals with a section of the bill that provides 90 days for tenants to stay in a home or an apartment…
Mr. Chairman, I have an amendment at the desk.
Mr. Chairman, the amendment that I propose to the House today is twofold. The first part deals with a section of the bill that provides 90 days for tenants to stay in a home or an apartment house that has been foreclosed upon.
The purpose of this amendment, and it is very narrowly drawn, is only as to those properties that are owner-occupied homes where the owner has covenanted with the lender that they are going to occupy the house. What happens is often the owner moves out, leases the property to someone, foreclosure begins. The lender has no chain of title, no connection with this particular tenant, nor is there any expectation that there would be a tenant because the owner said ``I am going to live there.''
Under the law today, there is no additional time beyond the foreclosure for a tenant to remain in that owner-occupied house. Under the bill that is proposed, that timeline is extended to 90 days beyond the foreclosure. My amendment shrinks that back to 30 days. So it is 30 days more than the law allows today, but less than what is proposed in the bill, because the lender has never had any dealings with that particular tenant. This is not like a multifamily apartment house where the lender expects that there are going to be tenants or an investor type of a loan where the lender expects a tenant to be in place. Ninety days is probably a reasonable amount in that situation, but not here, so I have asked to shrink it down to 30 days. That is the first part of the amendment.
The second part of the amendment is something I talked to Mr. Miller about, which is to clarify the language about when acceleration of a loan can occur. Now what we have said is acceleration occurs upon a default in payment or a due-on-sale clause or a material violation in the contract. So those are the two sections of this amendment.
I reserve the balance of my time.
I would ask my friend from Minnesota whether he has any other speakers? If not, I have the right to close on my amendment.
Well, I would say to my friend from Minnesota that I appreciate your comments, although I would disagree with you.
When it comes to a situation where tenants are expected to be in a property, whether it is a multifamily apartment house or something where there is this expectation on the lender, I would agree with my friend's points. But not here, not where there has been a covenant that it is going to be owner occupied. And often, that covenant comes along with a reduction in the interest rate, so there is consideration for it.
So I appreciate your point about not being too narrow and legalistic, but this is an important point, and it is one that deals with the contract itself and the certainty of the contract.
Secondly, the lender may have somebody else who is ready to come in and buy, and there are a lot of people who want to buy these homes, too. I would say to my friend from Minnesota, and they shouldn't be deprived of the opportunity to purchase them. The lender also may want to continue to lease the property out to the individual who is occupying the home.
So there are a number of reasons why, at 30 days, I think we are giving substantial time to these individuals to vacate the premises. That should be the cutoff date.
I would also remind my friend that, in the manager's amendment, Mr. Filner has an amendment that is part of it that gives notice to the tenant at the outset of the foreclosure that something is going on with the property so that there is not a surprise. So I would urge a ``yes'' vote on the Perlmutter amendment.
I yield back the balance of my time.