New GSE Policy AidsForeclosure Renters
Washington-Fannie Mae and Freddie Mac are implementing new policies that will allow renters to remain in their homes after the agencies foreclose on the owner.
Fannie is offering renters a new month-to-month lease to stay put or financial assistance to move to new housing if they choose to vacate the property.
"On behalf of the company, property managers are contacting renters in Fannie Mae-owned foreclosed properties to notify them of their options," the government-sponsored enterprise said.
Freddie is going one step further by allowing renters and former owner-occupants to rent and remain in the house.
"First and foremost, Freddie Mac's REO rental option is designed to help cushion the impact of foreclosure on families who own or rent homes," Freddie CEO David Moffett said.
"Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market."
GSEs extended a moratorium on evictions until Feb. 28. Meanwhile, Fannie and Freddie have resumed foreclosure sales after a two- month hiatus. Back in November, they said they would suspend foreclosure sales and evictions during the holidays, until Jan. 9. But they extended it until the end of January to give servicers more time to implement a new mortgage modification program.
But foreclosure sales are rolling again. In a recent report to Congress, the GSE regulator said Fannie and Freddie held 95,550 foreclosed properties as of Sept. 30, compared to 76,150 real estate-owned at the end of 2Q08. The GSEs' acquisition of foreclosed properties jumped 25% in 3Q08 to a 9,167 monthly rate.