Fannie Mae announced Thursday it is launching a “Deed for Lease Program” which will allow homeowners facing foreclosure — if they qualify —to lease their homes for up to a year.
To get that option, homeowners have to deed the property to Fannie Mae.
“The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications,” said Jay Ryan, vice president of Fannie Mae. “This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities.”
The program is designed for borrowers who do not qualify for some other loan workout program.
Borrowers transfer their property to the lender by completing a deed in lieu of foreclosure, then the owner leases the house at a market rate.
*NOTE: Not my writing, but breaking news I wanted to share with you asap. Here is the link to the story:
Fannie Mae Getting into the Rental Business
Fannie Mae launches 'Deed for Lease' program
Interesting program, at least is keeps money flowing into Fannie Mae.
...And it keeps people in their own homes!!!
That is smart, smart, smart!
Bravo!
Interesting, I'll have to read up on it for the details. Does this ultimately just prolong a foreclosure hitting the market? Will it still end up a discounted bank owned property?
It does sound like it could be a reprieve that might help some home owners get on their feet. If it can help even a few people then I think it well be worthwhile.
Do you know the criteria for qualifying?
Yep I'll have to look into this, it sounds interesting
Hi Mirela,
Hum, that's a new one of me!
Mirela,
I will have to check this out. I do see this as a plus but, am curious about the details.
Sounds like a great way to help home owners that might have a short term problem.
It will be interesting to see how this plays out. Could be a good option for home owner's in trouble but it is difficult to see the long term benefit for Fannie Mae.
This will be interesting to see how it plays out-- it either could prove out to be good or bad .
Mirela...I like the idea of the stability this offers on the surface, But like huge ocean liners and icebergs there is more below the surface and some in motion are hard to stop. Does Fannie Mae have to staff to take n such under taking...when they can't get out of their own way now?
Mirela - I am still trying to digest this and determine whether it will help stabilize things or just push the problems out into the future.
Very interesting solution for keeping foreclosed "vacant" homes occupied and create a stream of income for the banks. Sounds win-win for anyone who is looking to rent after losing their home, considering they may not be credit worthy to qualify for renting.
Look for changes on this one - once lenders assume the liability of being landlords, their plans may change - it's a well intentioned program, but banks are not accustomed to being property managers and there is a whole lot of room for mistakes in this approach.