Freddie Mac plans to let residents rent their homes after foreclosure
WASHINGTON – Jan. 30, 2009 – Freddie Mac today plans to announce a first-of-a-kind plan that lets homeowners and tenants temporarily stay in homes in foreclosure by renting them back, an effort to stop many of the sudden evictions that have come along with the housing crisis.
The program will let thousands of qualified former homeowners, as well as families renting from landlords, enter into a monthly lease on their homes after Freddie Mac has acquired them through foreclosure. Freddie Mac officials expect the program to help about 8,600 families in 2009.
The program gives homeowners and renters more time to find a new place to live and also keeps homes occupied. That’s a plus for neighborhoods where numerous foreclosures have led to empty, unmaintained, vandalized properties.
“For tenants, it’s a big difference,” says Mark Zandi, an economist with Moody’s Economy.com. “If this acts as a benchmark for other mortgage servicers, it would be a very positive development. It’s a win-win. “
Details of the program:
• Leases will be on a month-to-month basis.
• Tenants and homeowners will only have to pay market-value or existing lease rents, not the mortgage payments. Freddie Mac will hire a property management company to determine that amount.
• Tenants and homeowners must be able to show proof that they have enough income to pay the monthly rental amount.
• Freddie Mac will also explore loan-modification options that might be available for some borrowers.
The Freddie Mac initiative comes as the government is stepping up efforts to stem a wave of foreclosures that caught more than 2.3 million homeowners last year, up 81 percent from 2007.
The Obama administration has pledged to spend up to $100 billion to help people avoid losing their homes.
In mid-December, Fannie Mae also rolled out a policy that allows renters in a property that is being foreclosed on to rent that home rather than be evicted. It does not include homeowners. Up to 10,000 families are expected to be helped by Fannie’s rental policy; Freddie expects about a 30 percent acceptance rate.
The Federal Reserve this week announced a policy to help some distressed homeowners avoid foreclosure. The Fed said it would work with companies servicing mortgages now owned by the Fed to modify qualifying mortgages of homeowners that are 60 days or more delinquent on payments.
Saturday, January 31, 2009
Thursday, January 15, 2009
Fannie Mae Bans Evictions of Renters
When banks foreclose they will kick out anyone residing in the property. Now if that person or family happens to be a quality renter, why not let them stay in the property and pay rent directly to the bank. It's win/win for everyone. The renter(s) get a place to live and the bank gets the rent money plus someone to maintain and care for the property.
Now why did it take so long for these banks and the government to figure out that a good paying tenant helps reduce the loss to the bank???
Fannie Mae bans evictions of renters
WASHINGTON – Jan. 14, 2009 – Mortgage finance company Fannie Mae said Tuesday it has adopted a policy allowing renters to remain in their homes even if their landlord enters foreclosure.
The new policy will allow residents of about 4,000 properties to sign new leases with Fannie while the property is up for sale. Michael Williams, Fannie Mae’s chief operating officer, said in a statement that the change should “help bring a measure of stability to communities impacted by high foreclosure rates.”
Fannie Mae had indicated last month that it was planning to do so. Sibling mortgage financier Freddie Mac is working on a similar policy, company spokesman Brad German said.
But Amy Marx, an attorney with New Haven Legal Assistance in Connecticut, said Freddie Mac has not been responsive to requests that it do the same, and has continued with evictions of renters in recent weeks.
“We are thrilled that Fannie Mae has done the right thing,” she said. “Our hope that Freddie Mac will follow their lead.”
New Haven Legal Assistance and two other legal aid organizations in Connecticut represent seven tenants facing eviction on properties whose loans are held by Fannie Mae or Freddie Mac. The legal groups argue that financial bailout legislation passed in October requires the companies allow tenants to remain in their homes.
Some households, Marx said, haven’t been notified of Fannie Mae’s policy change by the real estate agents charged with selling the properties.
Fannie and Freddie said last week they will extend a suspension of foreclosure sales and evictions from single-family homes through the end of January. The companies had suspended foreclosures through the holidays.
The government-controlled home loan giants say the extension will allow borrowers facing foreclosure to keep their homes as they work to modify more loans.
Washington-based Fannie Mae and McLean, Va.-based Freddie Mac own or guarantee around half of the $10.6 trillion in U.S. outstanding home loan debt.
The pair were taken over by the government in September and placed in a conservatorship after mounting mortgage losses put them in distress that was a prelude to the broader financial crisis that hit Wall Street last year.
Now why did it take so long for these banks and the government to figure out that a good paying tenant helps reduce the loss to the bank???
Fannie Mae bans evictions of renters
WASHINGTON – Jan. 14, 2009 – Mortgage finance company Fannie Mae said Tuesday it has adopted a policy allowing renters to remain in their homes even if their landlord enters foreclosure.
The new policy will allow residents of about 4,000 properties to sign new leases with Fannie while the property is up for sale. Michael Williams, Fannie Mae’s chief operating officer, said in a statement that the change should “help bring a measure of stability to communities impacted by high foreclosure rates.”
Fannie Mae had indicated last month that it was planning to do so. Sibling mortgage financier Freddie Mac is working on a similar policy, company spokesman Brad German said.
But Amy Marx, an attorney with New Haven Legal Assistance in Connecticut, said Freddie Mac has not been responsive to requests that it do the same, and has continued with evictions of renters in recent weeks.
“We are thrilled that Fannie Mae has done the right thing,” she said. “Our hope that Freddie Mac will follow their lead.”
New Haven Legal Assistance and two other legal aid organizations in Connecticut represent seven tenants facing eviction on properties whose loans are held by Fannie Mae or Freddie Mac. The legal groups argue that financial bailout legislation passed in October requires the companies allow tenants to remain in their homes.
Some households, Marx said, haven’t been notified of Fannie Mae’s policy change by the real estate agents charged with selling the properties.
Fannie and Freddie said last week they will extend a suspension of foreclosure sales and evictions from single-family homes through the end of January. The companies had suspended foreclosures through the holidays.
The government-controlled home loan giants say the extension will allow borrowers facing foreclosure to keep their homes as they work to modify more loans.
Washington-based Fannie Mae and McLean, Va.-based Freddie Mac own or guarantee around half of the $10.6 trillion in U.S. outstanding home loan debt.
The pair were taken over by the government in September and placed in a conservatorship after mounting mortgage losses put them in distress that was a prelude to the broader financial crisis that hit Wall Street last year.
Is Your Home Worth Keeping?
This current real estate market is a mess. Millions of homeowners are "upside down" or "under water". Equity has eroded to the point where it no longer makes sense for people to continue making high payments on their home when they can rent for so much less. But is a short sale or letting your home go to foreclosure right for you? How will it impact your credit and finances?
I found this great article on how to determine whether or not your home is worth keeping. It goes without saying that you need to do what's best for you and your family. In some cases, it means toughing it out until the market turns. In others it means letting the house go. After reading the article you should have a better handle on your options.
http://articles.moneycentral.msn.com/Banking/HomeFinancing/is-your-home-worth-keeping.aspx?page=all
I found this great article on how to determine whether or not your home is worth keeping. It goes without saying that you need to do what's best for you and your family. In some cases, it means toughing it out until the market turns. In others it means letting the house go. After reading the article you should have a better handle on your options.
http://articles.moneycentral.msn.com/Banking/HomeFinancing/is-your-home-worth-keeping.aspx?page=all
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