Mortgage industry titans Fannie Mae and Freddie Mac, which have been under government control as of September 2008, will allow select borrowers who are in financial distress to remain in their homes as renters rather than lose them to foreclosure.
Fannie Mae was the first to make the move early last month. And according to a recent article in Business Week, the finance company has already “stopped about 20,000 foreclosure sales and halted 6,300 evictions of owners or renters this winter.”
Those are some staggering statistics for such a short time frame. But welcome news nonetheless for those who were able to take advantage of the assistance.
In addition to keeping people in there homes, the goal of the plan is to ensure that properties don’t fall into “disrepair.” The surge of defaults has had an unsightly impact on neighborhoods throughout the nation, knocking down home values and, in some cases, inviting trouble.
Here is a snip from Freddie Mac Chief Executive David Moffett:
“Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market.”
Fannie Mae and Freddie Mac “own or guarantee about half of the $10.6 trillion in outstanding U.S. home loan debt,” which certainly makes this latest news a step in the right direction. Finding and creating ways to keep people in their homes is a good thing on so many different levels.
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February 16, 2009 at 11:50 am
carii clawson
We have so many houses going into forclosure which results in these homes sitting vacant with no one taking care of maintance issues. We are in the remodeling industry and our business has dried up, the phones aren’t ringing. It just seems crazy that the talent we have to upgrade and the time we have now to do it is not being utilized. Doesn’t it make sense to take advantage of all these contractors who need work to upgrade and maintain these homes that are just sitting there losing $$$ every day. We have got to stop thinking inside the box and fix this!
February 18, 2009 at 2:34 pm
Jennifer
I want to know if bank-owned properties can be rented by a new, third party, not an existing renter. For example, I’m interested in a foreclosure that’s a lot larger & nicer than my current home. I don’t have cash to buy the foreclosure outright, but I do have plenty of cash each month to make the monthly note payment on the foreclosure as well as my current mortgage payment. Why aren’t banks advertising to people like me who want to lease with the option to buy? Isn’t this a “win-win” for everybody? If banks would open it up to renters, it would allow average people with good credit & good jobs, but without cash in hand to take advantage of this market. An advantage for the bank is that payments are being made immediately & the home is being taken care of because it’s now lived in. The advantage for the buyer is that, while I’m a renter, I can fix up what’s been gutted so it passes inspection & it gives me more time to sell my current home. Makes sense, huh, so let’s make it happen!
February 25, 2009 at 12:30 pm
Jack Shuckhart
The country needes bold leadership to change the direction of the economy.
1st step. For those Owner Occupied Homeowners in default three things need to be done: (a) Set the current loan balance to the estimatede value of their home; (b)Set the interest rate to the 30 year tbill rate or say 4%. (c)Put a change to the loan agreement so that if the home owner sells the house for more than the reset loan amount, half of that differnce would be repaid to fannie/freddie. This could be done without time consuming loan applications or approval process. The homeowner has a choice to accept the modification bey sending in the new payment amount – or rejecting it be advising in writing. For those owner occupied Homeowners not in default, offer to reset the interest rate to a lesser rate. As there are many different rates and terms, each loan would need to be modified by the lender. AND for those who want to be a homeowner…offer them incentives to be one.
2nd Step Provide a pro growth tax policy for small business which would reduce the tax burden and incent small business owners to create new businesses and jobs.
3rd Step. Federal – State and Local fiscal policy must show restraint and get spending under control… The loss of confidence in this administration and congress starts with passing an over 1000 page bill spending over a trillion dollars in a week – without allowng the county to examine the bill or know why any spending is a stimulous with out calling it “pork” or earmarks. If you are going to spend our money recklessly we will all suffer.
Our economy is driven by Consumers and Small Businesses. HELP THEM
March 29, 2009 at 3:17 pm
Yolanda
I want to know if bank-owned properties can be rented by a new, third party, not an existing renter.
For example, I’m interested in a foreclosure that’s a lot larger & nicer than my current home.
I heard on the radio a few weeks ago but can’t find a company offering foreclosed homes “for rent”
Does anyone know????