Hey Charlie Brown, we want to hold the football for you!

By
Commercial Real Estate Agent with NAI Tampa Bay

Mortgage finance company Freddie Mac said it will allow some borrowers to rent out their homes after losing them to foreclosure.

The goal of the new policy, announced Friday, is to prevent properties from becoming vacant so they won't fall into disrepair.

Freddie Mac also said it will allow renters to remain in their homes even if their landlord enters foreclosure. The McLean, Va.-based company currently has about 8,500 properties in the foreclosure process, but many of those are vacant.

misfortune

"Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market," said Freddie Mac Chief Executive David Moffett.  

Fannie Mae, which announced similar plans earlier this month, said it has stopped about 20,000 foreclosure sales and halted 6,300 evictions of owners or renters this winter. Under Freddie Mac's new policy, tenants and former property owners need to demonstrate that they have enough income to pay the rental bill.

Freddie Mac also said it would consider reinstating a mortgage for those borrowers who can qualify for a modified loan. Washington-based Fannie Mae and Freddie Mac were taken over by the government in September after mounting mortgage losses put them in distress that was a prelude to the broader financial crisis that hit Wall Street last year.

Both Fannie Mae and Freddie Mac also said Friday they would extend a previously announced suspension of evictions through the end of February. Fannie and Freddie combined own or guarantee about half of the $10.6 trillion in outstanding U.S. home loan debt.

 

I LOVE IT WHEN A PLAN COMES TOGETHER!!!

A team

 

Personally, I find this story to be kind of pointless.  I am sure the folks it has affected directly who stay in their homes and rent them feel differently, but alas, why not conclude that if they are income suffiecient to stay on and rent for a certain amount, why not work to find terms to achieve the same thing on a loan for purchase, whether through modification or refinancing.  I can see the small benefit to communities and Fannie and Freddie, but I also see a lot of needless angst, stress and paperwork.  Maybe I am in a bad mood when I write this, because a little part of me, feels like I am just playing Devils Advocate here and I also want to believe that this is a great idea!

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Rainmaker
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Randy "Lazarus" McAtee
Lazarus Realty - Fresno, CA
Owner/Broker, Lazarus Realty, Fresno California

Sean, it probably is a good idea.  Likely to help out folks who are distressed.  Certainly will keep theives from looting everything - right down to the copper pipes.  Probably not great for Landlords - methinks rents headed south.

Jan 30, 2009 04:43 AM #1
Rainer
55,585
Sean Dreznin
NAI Tampa Bay - Sarasota, FL
Commercial Investment Real Estate Agent

I think your right from the "neighborhood" perspective... 

I agree that Fannie and Freddie are working against Landlords and their struggle to maintain or increase rents or even rent their vacancies.  Now they have to battle for tenants against the government... OY VEY!

Jan 30, 2009 04:49 AM #2
Rainer
478,183
Not a real person
San Diego, CA

As of January 1, California made it more difficult to evict tenants. Previously tenants were due 30 days notice, now 60 days.

The way I read the Freddie Mac announced was explained here is that the borrowers will be allowed to stay in their homes and rent them from the bank after losing them to foreclosure so that they have a place to live. The way you worded it, "allow some borrowers to rent out their homes" makes it sound like the borrowers have to move and then try to rent the home. I don't think that's correct, although I guess they could do that if they wanted to.

Jan 31, 2009 09:27 PM #3
Rainer
55,585
Sean Dreznin
NAI Tampa Bay - Sarasota, FL
Commercial Investment Real Estate Agent

"Under Freddie Mac's new policy, tenants and former property owners need to demonstrate that they have enough income to pay the rental bill."

My intended perspective was based on the above information supplied in the article.  Not moving out and having to rent, but simply qualifying to rent.

Thanks for the comments.

Sean

Feb 01, 2009 12:00 AM #4
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Rainer
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Sean Dreznin

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