Social work/ social ac tion project - Essay Example

College: 292416 Tenant Protection and Foreclosure Prevention Legislation Foreclosure has become a widespread challenge that it has been hard to be aware of the plight for most mortgage and real estate experts. The number of tenants turning to out to be homeless in the Rhodes Island because foreclosure is constantly increasing. There is the growing risk of tenants being thrown out of their houses because the houses are being taken over by banks or lenders. They are ever seeking to repossess or dispose homes that are not been paid for by the homeowners.

Homelessness has increased by 43% by February 2009 as it was in February 2008 in the state as more residents are loosing their homes. This trend has been attributed to the on going economic crisis which has caused higher unemployment and foreclosure rates. The number of residents having shelters but predicting foreclosure and subsequent homelessness has quadrupled in the previous 9 months in comparison to last year’s. With the Rhodes Island economy struggling, this numbers are expected to have increased a lot by 2010.

The state does not have essential protection measures to house renters and therefore exposes them to foreclosure ending up being forced out of their houses even with no prior notice.There is need for immediate concern to the legislators to pass the Tenant and Foreclosure prevention bill more so the JUST CAUSE Bill which seeks to protect the rights and privileges of theses tenants. It is gaining popularity amongst many legislators and its high likely to be successful, the question is whether it is going to have positive effects to the state and the country’s economy as a whole.

It is going to reduce loans for mortgages of most citizens facing bankruptcy to assist save them from foreclosures. Just like the homeowners who fail to pay for the houses, the renters are also faced by the economic and foreclosure crises. The Bill still seeks to protect the tenants from eviction from their homes without prior notice. The banks and lenders would also be required to inform the tenants that the houses they are living in are facing foreclosure. Tenants would need to get some financial compensation to allow them to move and get their security deposit due to insolvency of the landlord.

It also has to protect the tenants from the financial devastitation caused by the forced move and the necessary liquidation of their property if they have to. The enactment of the foreclosure prevention law would have positive impacts to the families, neighborhoods, communities and the country as a whole. People would be given chance to restructure their loans payment in bankruptcy. This would assist them ease their obligation of paying back their mortgages. They would be in better position to settle with a judge on the mode they would use to repay the full mortgages but still retain their homes.

The current laws which permit modification of loans in saving some properties are not favorite for families looking for primary residential homes. The law would safeguard the homeowners from this unfavorisim hence the same benefits would be passed to the tenants who will enjoy protection against the uncalled for eviction.The Bill if enacted to law would address bankruptcy legislation that demands that all mortgage loans should have fixed interest rates and low loan-to-value ratios something that has led to most families’ financial distress.

It seeks to have the banks and renters give reduced principal, interest rates, do away with pre-payment penalties for homeowners to get affordable mortgages which would let them stay in their homes. Although the law might pose positive effects to the home owners and the tenants, it would have some negative impacts to the banks and lenders in that they will have much less say on the way the home owners should pay the loans and would not be able to repossess the rented money easily thus they would have to wait for longer before the loans are settled hence would be forced to lent wisely.

The cost of business in the state would be higher leading to increased mortgages in the days to come.With the tenants protected by this law if enacted, they would feel secure with their properties in their houses without unwarranted eviction and more people will have better chances of getting houses and reduce the problem of homelessness in the State. If more homeless people are going to settle in houses they thus would be more productive hence greater contribution to the country’s economy (RI Coalition).

Work CitedRI Coalition. Stimulating the Economy, growing Healthy Communities, 2009, retrieved on 21 April 2009 from < http://www.academia-research.com/files/instr/292416_legislation.txt >