Fannie Mae said it would start offering leases of up to 12 months as an avenue to keeping families in their homes. "It's a big step forward," says Dean Baker, co-director of the Center for Economic and Policy Research and a longtime proponent of rent-back programs.
"The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications," said Jay Ryan, Vice President of Fannie Mae. "This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities."
Leases under the new program may be up to 12 months, with the possibility of term renewal or month-to-month extensions after that period.
- What happens when the "new" tenant takes possession and the submits a line item bid to Fannie Mae for all the repairs needed to the property?
- Will Fannie Mae be responsible and held liable to repair these homes?
- Will Fannie Mae eventually adopt a new policy for tenant repair requests?
- Will it ultimately be the taxpayers who manage these properties?
- What happens when the "tenants" do not pay and are forced to eviction? Who pays for that?
As a contractor who specializes in repairing bank owned properties, I can tell you the answer to these questions will leave your liability head spinning. There will be plenty of pre-existing repairs that have been masked (e.g. mold issues) and as soon as the homeowner is an approved tenant, these issues will magically appear and Fannie Mae taxpayers will be forced to provide funds to deal with these issues.
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