Read Allan Pape's post today Are You Considering Walking Away From Your House Then You Have Got To Know Your Options that mentioned the Fannie Mae site http://knowyouroptions.com which provides information on options for homeowners who can not afford their mortgage payments.
Shortly after, I went to the site to check it out. I must say, it is an invaluable site for anyone who is not able to pay their mortgage.
As the blog post stated, the site does outline the 3 options available to someone in that position, namely foreclosure, deed-in-lieu and short sale.
I think most anyone these days is very familiar with foreclosure and short sale and many may know what a deed-in-lieu is.
However, I didn't know what deed-for-lease was until now.
In a deed-for-lease the homeowner can rent bank the property after they have given title to the mortgage lender through the deed-in-lieu.
It sounds like a great option for someone who can not afford the mortgage but can not or does not want to move out of the home. Maybe they love the neighborhood, don't want to disrupt the children's school year or work is close to the home.
Even nicer is that the rent paid would be determined by what the market rents may be, not whatever the mortgage payment was when the individual had the mortgage loan.
The lease period is usually 12 months with a renewal option PLUS the homeowner may even qualify for relocation assiatnce when the time comes to move on.
Only loans that are owned by Fannie Mae qualify for this program. The site even has a great tool to help the user search if Fannie Mae owns the loan. The site did mention, though that even if the loan is not owned by Fannie Mae some mortgage lenders may have a similar program. One need just call their lender and ask.
I think this is an awesome example of a program that can truly assist many families. Oftentimes, the shame and frustration of having to go through a short sale gets ascerbated by the logistical nightmare of finding a place and moving the household. Not to mention tha tif you have a scarred credit report, many property management companies don't want to rent to you.
If this program does what it says it does, those families can at least face the situation with some sense of normalcy and stability in their lives, however small that may be.