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Help for Renters - Fannie Mae Changes Policy

By
Real Estate Agent with Real Estate Showcase Photography

             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 rentersGone fishing sign in front of home 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.



Debi's signature

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.

Comments (16)

Pat Whitehouse
RE/MAX 1st Olympic Lynchburg Va - Lynchburg, VA
Broker/Owner

Hi there Debi-Great post. I think many of us forget about the responsible renters who just chose or don't have the choice of owning a home. So I'm glad to know that the gov't is stepping in and helping with that. I hope you had a great day. Have you recovered from yesterday. I still laugh when I think about it. I can't see you anymore when you're on because for what ever reason it isn't working. So I will just leave it here when I see you do a new post. If I don't get a chance to chat again before Christmas have a great holiday. ~~~~~~WAVE~~~~~~~ :-)

Dec 18, 2008 10:27 AM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Hi Debi, This is really good information. I had no idea that the tenants were being kicked out. I would have thought that the bank would have hired a property manager, to immediately notify the tenants of the new landlord.. and then start collecting rents under their Assignment of Leases and Rents clause in the DT.  Of course, that seems too sensible... what was I thinking?

I am really glad to know that more tenants will no longer be evicted.

Dec 18, 2008 11:25 AM
Barbara S. Duncan
RE/MAX Advantage - Searcy, AR
GRI, e-PRO, Executive Broker, Searcy AR

I wonder if the owner-financed people will be treated the same as renters.  I assume so because they are sorta glorified renters.

Dec 18, 2008 12:23 PM
Glen A. Mitchell
Keller Williams Peninsula Estates - Half Moon Bay, CA
Broker, CDPE, Santa Cruz, Half Moon Bay,El Granada

I have a tenant in a property I manage who will most likely soon be asked to leave when the bank takes back the property.  She has been there for about 3 years and had no plans to move soon.  It isn't going to be easy for her to find a good place and keep her kids in the school district she wants.  What a drag, I do feel sorry for the tenants that get stuck in this situation.  This is a good start though and hopefully more will have opportunities to stay longer.  Glen

Dec 18, 2008 12:42 PM
Anonymous
Anonymous

Pat, Thanks for checking in! I'm sure we'll talk again before the holiday!

Debi

Dec 18, 2008 01:46 PM
#5
Anonymous
Anonymous

Mary, yes, one would have thought....I can't figure out who they get to make these decisions, and what they think qualifies them to do so. Again, Fanny is the ONLY one who has officially changed their policy. Freddie has agreed, but not officially changed policy, and the others, well, the others won't say either way. Seems to be too difficult to find and implement logic.

Debi

Dec 18, 2008 01:50 PM
#6
Anonymous
Anonymous

Barbara, Don't know. No mention of it in what I've read. It would make sense, as you say. But, then again, so much is done that doesn't make sense, nothing surprises me. Thank you for your comment.

Debi

Dec 18, 2008 01:52 PM
#7
Anonymous
Anonymous

Glen, Hopefully it's a Fannie loan, and hopefully she can hang in there somehow until Jan. 9. If so, she's in luck. If not, my heart goes out to her, and the thousands of others like her.

I appreciate your input.

Debi

Dec 18, 2008 01:54 PM
#8
Gayle Balaban
The Best Spot Realty/Waterfront Real Estate/Ooltewah Real E - Chattanooga, TN
E. TN Waterfront Real Estate

Debi This whole thing is such an unbelievable mess.  Maybe things will start to settle down.

Dec 18, 2008 02:50 PM
Liz Moras Migic
Chilliwack, BC
Chilliwack, British Columbia - Realtor

Thats fantastic news!  Love your snowy backdrop!

Dec 18, 2008 03:29 PM
Debi Boucher
Real Estate Showcase Photography - Woodland Park, CO
"Realtor Showcase" - Real Estate Photography/Virtual Tours

Liz, yes it's good news. Even better when (if) they all jump on board! (P.S. Do the MeMe!!! ;)

Debi

Dec 18, 2008 03:41 PM
Debi Boucher
Real Estate Showcase Photography - Woodland Park, CO
"Realtor Showcase" - Real Estate Photography/Virtual Tours

Gayle, I really, really hope so. So many people are affected in so many ways. I don't think there's an industry out there that is not in the line of fire. Every one is on pins and needles, whether it's where they live, their jobs, all of it, you know?

Debi

Dec 18, 2008 03:43 PM
Heather Rankin
Rankin Realty at Lake Powell, LLC - Page, AZ
Lake Powell Real Estate

Things are edgy all over right now. Imagine being a renter, loosing your job and being kick out because your landlord is in foreclosure - I am sure it's happening somewhere. Here's to a better new year!

Dec 18, 2008 03:54 PM
Debi Boucher
Real Estate Showcase Photography - Woodland Park, CO
"Realtor Showcase" - Real Estate Photography/Virtual Tours

Hi Heather, Thanks for stopping by, and for your comment. I'm with you! Here's to a better New Year!

Dec 19, 2008 03:20 AM
Leslie Prest
Leslie Prest, Prest Realty, Sales and Rentals in Payson, AZ - Payson, AZ
Owner, Assoc. Broker, Prest Realty, Payson,

This is good for tenants. The only thing that bothers me is the "sign new leases" part. what lease will they use, who will deal with the tenants needs,who will make sure state laws are accounted for, what about the security depost, etc. AS a property manager, I shudder to think of leased properties taking as long to get anything done as it ususlly takes to get offers in on foreclosed properties.

Debi, I'm going to re-blog this on my outside blog, since we do a lot of rentals. Hope you don't mind.

Dec 19, 2008 03:58 AM
Debi Boucher
Real Estate Showcase Photography - Woodland Park, CO
"Realtor Showcase" - Real Estate Photography/Virtual Tours

Leslie, absolutely, feel free to use it however you'd like.

Debi

Dec 19, 2008 04:06 AM