Fannie Mae is changing their policies to allow renters in foreclosed homes to stay…
In a move that provides relief to thousands of renters who face eviction but draws the federal government even deeper into the housing market, the loan giant Fannie Mae said Sunday that it would sign new leases with renters living in foreclosed [...]
Fannie Mae is changing their policies to allow renters in foreclosed homes to stay…
In a move that provides relief to thousands of renters who face eviction but draws the federal government even deeper into the housing market, the loan giant Fannie Mae said Sunday that it would sign new leases with renters living in foreclosed properties owned by the company.
It is the first nationwide effort to provide widespread relief to renters ensnared by the unfolding mortgage crisis, and it will effectively transform Fannie Mae — a government-controlled mortgage finance company — into a national landlord. It may also increase pressure on private lenders to establish similar programs and on lawmakers to pass renter relief…
…In recent months, skyrocketing foreclosure rates have exposed as many as 70,000 renters to evictions, even though many never missed rent payments, according to analysts who track housing data…
…Fannie Mae’s initiative is expected to initially benefit as many as 4,000 renters living in foreclosed homes owned by the company…Fannie Mae will now offer renters in foreclosed properties month-to-month leases until the property is resold…A spokesman for Freddie Mac said that the company was looking at a number of options, including a program similar to Fannie Mae’s, but that no decisions had been made…
…“We’re not in the business of managing rental properties, and we’re not in the business of being a landlord,” said Thomas Kelly, a spokesman for JPMorgan Chase, which owns about two million loans. “Clearly the renter is caught in the middle in cases like this. When a property is in foreclosure, we follow the law.”
Some lawmakers and housing advocates say such policies are unjust.
“If your loan is owned by Fannie Mae, you get to stay in your home. If your loan is owned by someone else, you’re on the street,” said Mr. Taylor of the National Community Reinvestment Coalition. “These banks need to realize they’re in the property management business now, whether they like it or not.”
Last year, the House passed a measure that would require the new owner of a foreclosed property to inform renters at least 90 days before an eviction. That bill failed to pass the Senate. Law enforcement officers in some states have refused to evict residents of foreclosed properties.
But Yadilka Torres, who rents a home in New Haven, Conn., for $775 a month, had no such protection. Fannie Mae took possession of her house in September, when it went into foreclosure. Even though she was current on her rent, she received an eviction notice saying that she and her two young children would have to leave.
She looked for another apartment but could not find anything affordable. Under Fannie Mae’s new policy, she will now be allowed to stay. “I was feeling so nervous,” Ms. Torres said. “I’ve tried very hard to pay the rent and to pay all my bills, and it seemed unfair this was happening. I’m very grateful we won’t have to move.”
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