Fannie Mae Gets Into The Home Rental Business

Services for Real Estate Pros with Real Property Management Metro MD/DC

Great post about the Big Banks renting properties.

I think its a great way to keep the property from being vacant and vandalized. Big banks doing Property Management.  Who would have thought...

Original content by Howard Bell

 Good News for foreclosure victims

Some homeowners will get an option to rent the home that they just lost. Its possible to stay in your home as a renter. Fannie Mae will give borrowers facing foreclosure an option to rent their homes for a year. Foreclosed home owners will be able to sign a one year lease, with possible month to month extensions with Fannie Mae. Good for everybody.

Homeowners get a little relief and are able to remain in their homes for a year or more. This will buy them the time they need to regroup. It will also help keep neighborhoods from going missing. Rather than rows of abandoned homes with all the crime and destruction that vandals create.. Neighbors that have not lost their homes will not see more equity loss as squatters and criminals move into vacant homes. The banks are reluctant landlords and they are allowing property to decline.

It will keep supply off the market for at least another year and that is good for all the handlers, Fanne Mae because it can put off the expense of a foreclosure, the banks because less supply will protect equity in homes they are off loading and everyone one because it will help stabilize home prices. I dont think we can have a strong recovery without real estate.

To qualify, homeowners have to live in the home as the primary residence and prove that they can afford the market rent, which will be established by the management company running the program. In many cases, rents will be less than the mortgage because properties that are now worth far less than they originally paid.

The downside is seems to be that homes that might normally have been foreclosed and sold will now remain owned by taxpayers. Homes, according to Dr Shiller have risen faster in the last few months than he has ever seen. Perhaps Fannie will profit a little while doing a good thing for families that must be a little traumatized by it all. And even if prices don't rebound quickly. Fannie Mae gets rental income, avoids foreclosure expenses gets to helps people.


Thanks for Reading

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Posted by

BJ McKellar

RPM DC Metro


Comments (1)

Barb & Sal Dragotta
Macomb, MI
Macomb County Michigan's always scary to me when the Twins--Fannie or Freddie want to 'do something nice for the Homeowner" ..something to watch isn't it.  When someone rents they don't actually gain anything [except for the roof over their head], so how does this aid the almost in foreclosure owner in the long run. Hope that any owner who does this KEEP scrupulous records; would truly love to be wrong in this.  
Prosperous 2010 to You & Yours
Barb & Sal

Jan 08, 2010 06:36 AM