Rather than foreclose, Fannie Mae home borrowers could become renters
Last week Fannie Mae (FM) announced a new program that will allow homeowners who hold a FM mortgage to become renters of their home.
Deed for Lease will permit borrowers to transfer their ownership to FM and sign a rental agreement for one year. After that period, leasing will be on a month-to-month basis. This deed-in-lieu-of a foreclosure has less of an impact upon a borrower’s credit record than a foreclosure.
This program is targeted for those homeowners who are at risk of foreclosure, but who do not meet the requirements for a government loan modification. Fannie Mae has outsourced the management of these properties.
To be eligible, the home must be the primary residence and the homeowner has to verify that they can indeed be responsible for the rental cost. The amount cannot be more than 31 percent of the homeowner’s pretax income and will be determined by the management company.
Jack Ryan, a Fannie Mae vice president, was quoted in a statement as saying that the Deed for Lease program will “eliminate some of the uncertainty of foreclosure, keep families and tenants in their homes during a transitional period and help to stabilize neighborhoods and communities.”
TALK BACK: What do you think of the Deed for Lease program? Post your comments below.
Posted by Sharon Walker
Tags: deed for lease, fannie mae lease program, foreclosure help
I think this Deed for Lease is nothing but a SCAM!!!! They just want the homeowners to give them the deed, let them live in their homes long enough for the housing market to get back on track and then kick out the people so they can sell the house and make a profit at the homeowners expense!
The better thing to do is to help all the Unemployed Homeowners stay in their homes and either put a 1 to 2 yr moritorium on foreclosures or use paid back TARP money for low interest loans to the Unemployed homeowner or enact the Pennsylvania HEMAP program.
It is much better to leave people who fell on hard times and lost their jobs to no fault of their own stay in their homes and pay something till they can get back on their feet then to FORECLOSE! It’s time the GREED is replaced with compasion and work with the Unemployed Homeowners. It would work out better in the end and save the housing market from a total colapse!
November 19th, 2009 at 3:48 pm