The Newark/Essex Foreclosure Taskforce recognizes that as a result of the foreclosure crisis, there are many families both homeowners and tenants who
have been displaced or will be displaced from their homes. Homeowners are displaced when their homes are sold at sheriff’s sale by the bank. Homeowners are also displaced when they choose bank approved alternatives to foreclosure such as a short sale or deed-in-lieu. All of this foreclosure activity has the end result of the families being required to move from their home.
The affects of foreclosure on tenants can sometimes be forgotten. While tenants are not the ones who obtained the mortgage with a bank, when they rent from a landlord who is in foreclosure they are also impacted. In New Jersey there are strong laws that protect the rights of tenants whose landlords are in foreclosure. However, many times tenants are still displaced. The displacement of tenants can come when the landlord abandons the property and the tenants are now living in a property that is without utilities and is not being maintained. Some tenants are also displaced when they decide they do not want to live with the uncertainty of their landlord’s foreclosure.
When families are displaced due to loss of housing, there is typically an underlying economic issue. For homeowners, being in foreclosure indicates that they are having a financial hardship due to either loss of income or increased expenses. Most homeowners who get to the point of foreclosure or agree to give up their home through short sale or deed-in-lieu have typically exhausted all of their financial resources i.e. savings, retirement accounts, etc. This makes transition to a new home very difficult without monies for up front security fees and utility deposits. Lack of good credit also makes it difficult for residents to find housing or they are often required to pay higher security deposits.
For tenants, if their landlord has abandoned the property, they are now faced with moving without the benefit of their security deposit. They may also have their own financial difficulties and credit issues that make relocation to a new home difficult.
While finding new housing is the primary focus of families displaced by foreclosure, there are many more needs for resources and supportive services. The report, “The Impacts of Foreclosure on Families and Communities” by The Urban Institute in May 2009, outlines what happens to families and communities in the foreclosure crisis. The report lists as issues to families – displacement and housing instability, financial insecurity and economic hardship, personal/ family stress, disrupted relationships and ill health. (http://www.urban.org/ UploadedPDF/411909_impact_of_forclosures.pdf)
The Displaced Families Resource Guide seeks to provide residents in Newark and the Greater Essex County with information on services that can be accessed to assist them in their relocation. The information in the printed guide is current as of its printing. However, the guide will be updated ongoing through the Newark/Essex Foreclosure Taskforce website.