RI Treasurer Caprio Says Renters who Stayed out of Subprime Frenzy Deserve Protection when Landlords Default

General Treasurer asks Senate Judiciary Committee to support legislation to shield renters from subprime fallout, preserve quality of life in RI neighborhoods

PROVIDENCE -- 4/1/08 -- Rhode Island General Treasurer Frank Caprio testified before the Senate Judiciary committee this afternoon in support of legislation he has proposed to protect Rhode Island renters from becoming the next wave of victims in the subprime mortgage crisis. In addition to leaving many homeowners struggling with mortgages they cannot afford, the collapse of the subprime mortgage market has devastated many renters who are being left without a home because their landlords were unable to avoid foreclosure.

Caprio is championing legislation developed by Rhode Island Housing which would make sure renters are informed of pending foreclosures and given information on legal and housing counseling resources. The legislation would also require at least 60 days written notice of eviction by the new owner of the property and ensure continuation of the same basic services—water, heat, and electricity—which they were receiving under the previous rental agreement.

In the first three months of 2008 alone, more than 400 eviction orders have been filed in Providence District Court.

“At a time when Wall Street and the financial world was playing fast and loose, pushing mortgages to underqualified people, renters made the decision to avoid the frenzy, keep their heads down and work hard to pay their rent,” said Caprio. “This legislation is meant to protect people who paid their rent on time and have been good tenants by giving them enough time to find new housing.”

The legislation was developed by Rhode Island Housing and Caprio is a member of the organization’s Board of Commissioners, which has played an active role in providing assistance to homeowners and renters in the state who have been affected by the subprime crisis. In November, the agency established the Rhode Island Housing HelpCenter to make more residents aware of their options and provide individual counseling, advice and education to protect them from losing their homes, while providing renters with the information they need to make safe, informed decisions about finding an affordable home.

“The foreclosure crisis, while tied to the downturn in our economy, is unique in that the issues of under-regulation and over-speculation on Wall Street have come to have an immediate and devastating effect on Main Street,” said Caprio. “With this bill, we want to give renters the basic decency of a considerate and compassionate transition in the event their landlord defaults on a mortgage and the bank forecloses.”

Source: Rhode Island General Treasurer

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