Renters Now Allowed To Stay In Foreclosed Homes
Until now, when the renter's landlord failed to pay the mortgage, and the home was foreclosed on, the renter was just plain out of luck - facing eviction even if they had been paying their rent. Single family homes, and multi unit investment complexes would see the renters forced to move out. In the case of multi unit properties, this lack of cash flow clearly makes it more difficult for the property to sell later.
Going into effect on January 9, 2009, Fannie Mae will begin acting as landlord, and will sign new leases for thousands of renters living in foreclosed upon properties. (An estimated 4,000 renters)
As a part of the 700 billion dollar Emergency Economic Stabilization Act, both Fannie and Freddie were required to allow tenants to stay in their homes, as long as they were paying their rent, until their leases ran out. Apparently, they were having some trouble following those guidelines, but Fannie at least, has changed their policy. To date, Freddie has not, nor have any in the banking industry.
In November, according to Realty Trac, there were nearly 260,000 foreclosure filings. We've all been hearing alot about the home owners in trouble, but what about the renters? Imagine paying your rent on time, being a responsible tenant, and evicted just the same?
Fannie Mae's decision will affect the 4000 renters under their books, but what about the thousands more, with landlords having different types of loans, going into foreclosure?
Yes, I think it's time renters' rights were respected as well. I hope the other financial institutions will follow suit, and soon.
Prudential Professional REALTORS, ASP REALTOR, Woodland Park Real Estate, Woodland Park Colorado 80863 – Serving the City of Woodland Park, Teller County, Ute Pass, and Park County since 1997.
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