Sunday, December 14, 2008

GSEs to Let Renters Stay after Foreclosure

by Bill McBride on 12/14/2008 09:02:00 PM

From the NY Times: Fannie Mae Lets Renters Stay Despite Foreclosures

Fannie Mae said Sunday that it would sign new leases with renters living in foreclosed properties owned by the company.
...
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.
...
“While it may be sometimes tougher for us to sell a property when people are in it, we understand that lots of people are in tough situations right now,” said Chuck Greener, a Fannie Mae spokesman. “If a renter wants to stay in their home, we’ll make that happen. And if they want to move out, in many cases we’ll help them pay for the move.”
With so many vacant homes for sale, it makes sense to offer renters month to month leases to stay (instead of evicting them even if they are paying their rent). It sounds like Freddie Mac will offer the same program, although I doubt the private sector will follow their lead.