According to Realty Trac, one in every two-hundred homes in the city had a foreclosure filing last month, compared to one in every 563 homes nationwide. That's more than twice the national average.
Now, local officials are taking steps to protect renters from being evicted from foreclosed homes.
Michelle Dirickson says her family had been renting half of a duplex in Merced for three years when they suddenly found out it was up for auction. The owner had gone into foreclosure without telling them, and the lender wanted the family to move out quickly.
"It was very stressful, it was very traumatic," Dirickson said. "They were posting notices on our door from the attorneys every day saying we were going to be evicted even though we were in contact with them and doing everything we were supposed to do."
Dirickson says the short notice forced her family to move into a smaller home with a higher rent. Now Merced officials are trying to keep other families from facing that same nightmare. This week the city council approved a new ordinance to offer tenants more protection.
"No longer would a bank be able to use just a change of ownership as a reason for evicting a tenant," City of Merced spokesperson Mike Conway said.
Conway points out the ordinance is only for people have always paid their rent on time and lived up to all other obligations. It would still require tenants to move out if the new owner wants to live in the home.
However, realtor Andy Krotik says the measure is pointless.
"The main concern is the ordinance is not necessary. There's already protections afforded to tenants who are victims of foreclosure," Krotik said.
Krotik also argues the ordinance is a waste of city resources, but Conway says the city's involvement would be minimal.
"This is called a self-executing ordinance which means it's up to the individual tenant to enforce it," Conway said.
The ordinance must still survive a second reading before taking effect, and Krotik says he and other realtors plan to fight it again once the new mayor and two new council members are sworn in.
Dirickson said she hopes it holds up.
"This law doesn't cost anybody anything. It doesn't hurt anybody, and it helps families and it stabilizes communities," she said.
The ordinance could take effect by the end of the year.