Foreclosure Affected Renters Are Getting Help From Fannie Mae
Foreclosure affected renters are getting help from Fannie Mae as the federal government is getting more involved in solving the foreclosure triggered crisis. Fannie will sign new agreements with the tenants who are occupying the foreclosed houses that are owned by Fannie.
It is the first national effort of its kind that will be offering assistance that has been caught up in the foreclosure mess. By this move Fannie Mae, a jumbo mortgage company under governmental control will become a national landlord. This will create pressure on the private lenders to emulate similar plans. Lawmakers too will be prompted to introspect and devise ways to offer help to foreclosure-besieged tenants.
John Taylor of National Community Reinvestment Coalition said, “There are renters all around the country who have been holding up their end of the bargain and paying their rent faithfully, but the landlord got into trouble, and so the renter is now unfairly facing eviction.” He added, “It’s really good news that Fannie Mae is doing this. Now the question is whether the private sector will follow suit.”
In the last few months astronomical foreclosures have shown that about 70,000 renters have been subjected to evictions due to no fault of theirs. They never missed payments. In many states the renters get no legal protection and have to vacate once the landlord is foreclose upon, irrespective of the terms of their lease. The big jumbo companies like Morgan Chase and Bank of America have special policies about the tenants.
The helping hand being extended by Fannie Mae is expected to assist in the first phase about 4,000 tenants who have been living in houses that have been foreclosed upon by Fannie Mae. Till not Fannie Mae has only dealt with the buying and selling of mortgages. But today with the mounting number of foreclosures the problem of tenants living in the foreclosed houses has gained prominence.
At the end of September Fannie Mae possessed 67,500 properties. Most of these were occupied by the owner. Under the new arrangement the former owners would not be given permission to rent out the houses that they had surrendered to foreclosure.
In November both Fannie Mae and Freddie Mac suspended for the time being all foreclosure proceedings till early January. Fannie Mae is now offering lease to the renters who are in occupation until the property is sold. The lease will be from month to month. The details of the plan are still being worked out.
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