NY Times Reports: Fannie Mae to Let Renters Stay Despite Foreclosures

220706 Resource 178435 178982 1 1229314398622 1251389278861 Controlled Another Unprecedented Move in the Housing Crisis

Fannie Mae Announced That It Will Not Evict Renters on Foreclosed Homes

In another unprecedented move related to the foreclosed homes, <a title="Background Piece" href="http://topics.nytimes.com/top/news/business/companies/fannie_mae/index.html?inline=nyt-org" target="_blank">Fannie Mae – totally under control of the federal government since September 8 </a>– announced on Sunday that it will not evict renters residing in homes it forecloses. Freddie Mac is said to be planning a similar move. This move provides relief to thousands of renters who faced eviction, but it also provides some income to Fannie Mae on those homes and keeps the tenants paying the utilities and maintenance on the homes instead of putting them into the inventory of unsold homes that has piled up around the country. Fannie Mae will suddenly have to learn about property management and will renegotiate month-to-month leases with the tenants on an on-going basis. That last set of issues is what may keep private lenders from following suit. Last month, when <a title="Mortgage Giants Suspend Foreclosures for the Holidays" href="item/218611" target="_blank">Fannie and Freddie Mac announced they would suspend foreclosure actions from mid-November through January 9</a>, many major private lenders happily joined the recess. Since the homes they would have foreclosed were not likely to sell quickly, and because lenders are hoping to get new work-out plans into place that will reduce then number of foreclosures, there were incentives to join that unprecedented plan. This latest move has not been greeted with the same tone: <blockquote dir="ltr" style="margin-right: 0px"> “We’re not in the business of managing rental properties, and we’re not in the business of being a landlord,” the <a title="NY Times Report" href="http://www.nytimes.com/2008/12/15/business/15evict.html?partner=permalink&exprod=permalink" target="_blank">New York Times quoted Thomas Kelly, a spokesman for JPMorgan/Chase, as saying</a>. The recently-merged bank owns about two million mortgage loans. “Clearly the renter is caught in the middle in cases like this. When a property is in foreclosure, we follow the law.” </blockquote> <a href="http://www.keytlaw.com/azrealestate/tenantforeclosure.htm">In Arizona, that law typically results in renters of foreclosed homes being evicted by the foreclosing bank</a>. Fannie Mae and Freddie Mac were taken over by the Federal Housing Finance Authority in September when the crisis in financial markets threatened the flow of credit for them. Their new regulator, James Lockhart, said he expects both companies to issue new policies soon about tenants remaining in foreclosed properties. When those policies are clear, private lenders may decide this idea is not such a bad one – given the alternative of holding a vacant home in a plunging market.   9 application/xml false Arizona landland tenant law Fannie Mae Foreclosures Freddie Mac renters in foreclosures NY Times Reports: Fannie Mae to Let Renters Stay Despite Foreclosures Freddie Mae will likely follow with a similar policy -- private lenders initial reaction cautious http://www.nytimes.com/2008/12/15/business/15evict.html?partner=permalink&exprod=permalink Mortgage Giants Suspend Foreclosures for the Holidays First unprecedented move to relive pressure of foreclosures http://blog.bestflagstaffhomes.com/public/item/218611 Mozilla/4.0 (compatible; MSIE 8.0; Windows NT 5.1; Trident/4.0; .NET CLR 1.0.3705; .NET CLR 1.1.4322; Media Center PC 4.0; .NET CLR 2.0.50727; Zune 3.0; .NET CLR 3.0.4506.2152; .NET CLR 3.5.30729) 127.0.0.1 127.0.0.1 $Admin 67.172.146.66 false true false false true 178975 false false true false false false true 178435 blog blogsite/BestFlagstaffHomes/web