Fannie Mae has apparently decided to get in the rental business:
In a move that provides relief to thousands of renters who face eviction but draws the federal government even deeper into the housing market, the loan giant Fannie Mae said Sunday that it would sign new leases with renters living in foreclosed properties owned by the company.
It is the first nationwide effort to provide widespread relief to renters ensnared by the unfolding mortgage crisis, and it will effectively transform Fannie Mae — a government-controlled mortgage finance company — into a national landlord. It may also increase pressure on private lenders to establish similar programs and on lawmakers to pass renter relief.
“There are renters all around the country who have been holding up their end of the bargain and paying their rent faithfully, but the landlord got into trouble, and so the renter is now unfairly facing eviction,” said John Taylor, president of the National Community Reinvestment Coalition, a consumer advocacy group. “It’s really good news that Fannie Mae is doing this. Now the question is whether private sector will follow suit.”
This isn’t just good news for renters- it could be good news for Fannie Mae as well. When you consider all the empty homes they own, a little cash flow on some of them couldn’t hurt.
Yes, this is good news.
They should not only be renting to existing renters of investment properties that are being foreclosed on, but also go into the business of renting to the OWNERs of properties they are foreclosing on.
That would be FAR better than trying to prop up housing prices (re-inflate the bubble), which is doomed to fail and make the world economic situation even worse.
Government controlled rentals? How is this going to help anything? Our economy relies too heavily on homes being sold and owners putting money into those homes. Sounds like a stall(PR) tactic. There are sad stories everywhere, not just people renting foreclosures.
I don’t think I’d call it good news overall exactly, but it has to be better for the agency balance sheet than empty homes.
Freemonster-
I keep wondering when people will figure out that they are ALREADY renting from their lender- at above market.
If I have NO equity, but the bank does, I don’t own the house- they do. That makes me a renter. I think that the “loan modification” plans just change the “lease agreement” at unfavorable terms to the borrower.
Freemonster
>>Government controlled rentals?
>>How is this going to help anything?
If there was a choice between borrowing thousands of future tax dollars per capita in a doomed attempt to try and prop up the housing market (and forgive parts of others’ mortgage debt)… or having government NOT spend everybody’s money to forgive the debt of the bubble-maniacs, but only have the government keep and rent out the properties.. it is in my mind good news to see the latter.
Don’t forget how much money has already been spent in all taxpayers’ names to try and fix this problem. At LAST this is a solution that makes more sense than forcing those people that were most prudent to suffer artificially-sustained high prices and debt.
Can’t sell it? May as well rent it. Genius!
I guess I never looked at a rental agreement close enough to see the fine print regarding eviction upon foreclosure.