Posted on 12/15/2008 9:50:05 AM PST by BGHater
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.
“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,” said John Taylor,president of the National Community Reinvestment Coalition,a consumer advocacy group.“It’s really good news that Fannie Mae is doing this. Now the question is whether private sector will follow suit.”
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. In many cities and states, renters can be evicted after their home goes into foreclosure, regardless of how long their lease stretches into the future.
Many financial institutions — including JPMorgan Chase and Bank of America — have policies to evict renters after foreclosure, company representatives said.
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 has traditionally only bought and sold mortgages. But when a loan held by the company goes into foreclosure, Fannie Mae gains ownership of the underlying property until it is resold to new investors.
(Excerpt) Read more at nytimes.com ...
It seems fairly foolish to boot out renters who are paying their rent.
Forrest Gump Explains The Mortgage Mess
The best explanation yet...
Mortgage Backed Securities are like boxes of chocolates.
Criminals on Wall Street stole a few chocolates from the boxes and replaced them with turds. Their criminal buddies at Standard & Poor rated these boxes AAA Investment Grade chocolates. These boxes were then sold all over the world to investors. Eventually somebody bites into a turd and discovers the crime. Suddenly nobody trusts American chocolates anymore worldwide.
Hank Paulson now wants the American taxpayers to buy up and hold all these boxes of turd-infested chocolates for $700 billion dollars until the market for turds returns to normal. Meanwhile, Hank’s buddies, the Wall Street criminals who stole all the good chocolates are not being investigated, arrested, or indicted.
Mama always said: ‘Sniff the chocolates first, Forrest’.
The bailout, a different perspective
Back in 1990, the Government seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it. They failed and it closed. Now we are trusting the economy of our country to a pack of nit-wits who couldn’t make money running a whorehouse and selling booze?
Why pay the rent?
Agreed, especially this time of year! Getting something out of the place is better than getting nothing!
This is fine if they pay it to the lender, make somewhat of a homestead type action.
Socialism is here and it can’t all be blamed on 0bama.
0bama isn’t a socialist anyway, he’s a communist.
As a temporary measure? Agreed. But Fannie Mae needs to be eliminated or greatly reduced as soon as possible.
Government created this mess to start with. Unfortunately, no one in government seems to be talking about fixing the problem. The patient (economy) has cancer (government intrusion), but the doctors (politicians) are focused only on applying bandages.
Our leaders are meddlers who think more meddling is the solution, and our economy is like a patient on twenty different types of medications. Each one creates side effects that require additional prescriptions to alleviate. A wise doctor would slash the number of medications to the bare minimum necessary, but that is something our present leaders are ideologically incapable of doing.
Wait and see, a lot of these proposals will end up being stealth reparations under another name.
That is true, but how are the banks to know if that is the case? Their failure to pay may have been the reason for the owner's default.
They should be made to produce rent receipts or cancelled checks proving payment if they wish to stay. Then it becomes a win-win.
Yes. But it means the homeowner is getting the monthly payments (income) and not having any expenses (mortgage payments).
How convenient.
That's a pretty cheap rent price for a HOUSE in New Haven, CT. I like this idea, but this home renter needs to pay the going rate
If these renters manage to pay rent for six months, Fannie Mae will just come to them and say ‘Hey, how would you like to BUY the property you’re living in now at the rent you’re paying?’ and they will probably get a lot of takers.
with a 60 year mortgage?
I got the notice yesterday that the owner of the property I rent has defaulted and that the property will be sold at auction in March. According to the notice, he hasn’t paid his mortgage since July. I’m curious as to where the rent I have paid since then has been going.
Contact the lender and see if you can buy it on a short sale.
You could end up owning the property and paying less in mortgage than you are in rent.
If it was a single family home I might consider that but unfortunately it is a four-plex so it’s a little out of my league.
Whatever the new trick is...
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