Fannie Mae gives renters a break

[sabra]

Source: CNN

NEW YORK (CNNMoney.com) — Fannie Mae, the battered mortgage giant, has agreed to act as an interim landlord for thousands of tenants living in foreclosed homes around the country.

Fannie spokesman Brian Faith said his company will sign new leases for the approximately 4,000 renters in its foreclosed properties. These tenants would otherwise face eviction, even if they had been paying their rent on time, because of the owners’ failure to pay the mortgage on the property.

Faith said this policy will go into affect on January 9. He said his company will observe an existing moratorium that both Fannie and Freddie Mac put on new evictions during the holiday season until that date.

Freddie Mac, the other government-backed mortgage outfit, has not announced any changes, but a spokesman hinted that the company is developing a new policy.

Read more: http://cnnwire.blogs.cnn.com/2008/12/15/fannie-mae-gives-renters-a-break/

[LeftyMom]

1. Considering that they're having no luck moving vacant houses, I'm not surprised.

It makes more sense to get a little revenue and free upkeep via a renter until the market picks up versus letting a house sit and deteriorate until somebody finally buys it at fire sale pricing.

[Waiting For Everyman]

2. These owners should have to pay a big fee every month they're vacant.

The owner took the action it wanted to in foreclosing, it should also have to pay for houses being left empty - the result of their action. Banks load all kinds of fees on other people, turnabout is a good idea too. Maybe then, they wouldn't think it was so cost-effective to foreclose in the first place. That would change their equation a little bit, and make it less "in their interest" to do it.

They should pay their way, and be penalized for what they cost others just like everybody else.

I'd make it something like $5K per month, for each property. Let them think that over a while. I'd enact that Jan. 20th nationally.

Oh, and since it would be a tax lien, the local governments would end up with the properties if it wasn't paid each month by the owners. I'd make it a swift repo process too. Charging them automatic legal fees, of course.