Fannie Mae Lets Renters Stay Despite Foreclosures

In an article in the New York Times, author Charles Duhhig talks about Fannie Mae and their new program to help relief renters who face eviction.

Fannie Mae will:

“sign new leases with renters living in foreclosed properties owned by the company”

Fannie Mae is the first nationwide company to provide relief for those customers whose houses have been foreclosed. As John Taylor, president of the National Community Reinvestment said:

“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…It’s really good news that Fannie Mae is doing this. Now the question is whether private sector will follow suit.”

Now this is a great offer for those customers whose house’s are owned by Fannie Mae, but what is going to happen to those customers whose houses aren’t?  Fannie Mae, instead of being a government controlled mortgage finance company, had become the landlord of thousands of houses that face eviction.  Are other private sectors going to follow and adapt this program?

Thomas Kelly, a spokesman for JP Morgan Chase said:

“We’re not in the business of managing rental properties, and we’re not in the business of being a landlord…clearly the renter is caught in the middle in cases like this. When a property is in foreclosure, we follow the law.”

In defense, John Taylor again says:

“If your loan is owned by Fannie Mae, you get to stay in your home. If your loan is owned by someone else, you’re on the street…these banks need to realize they’re in the property management business now, whether they like it or not.”

The government has also tried to help out customers with foreclosed homes.  The House tried passing a bill where the new owner of a foreclosed property will have to notify renters 90 days in advance before an eviction.  This bill failed to pass the senate.

The article ends with a story about a customer who was evicted from a foreclosed house and couldn’t find an apartment.  She says she worked very hard to pay her rent and still pay her other bills.  Thanks to Fannie Mae and their new policy she will be allowed to stay in her home.

This article just makes me think about America’s problems with foreclosed homes.  It’s a very hard to say whose fault it is.  After researching and talking to some people, I found out that some real estate agency’s give out their mortgages and then increase them two or three years later.  A lot of home owners dont know this and that’s one of the reasons why they cannot make those payments and their house become foreclosed.  These home owners should read their contract front and back before signing any agreement, look for opinions from experts, not get into a mortgage that they know they are not going to be able to pay back, and therefore they could save themselves a headache a few years later.  Another reason that we should take into account is all the unemployment going on in America.  Wealthy companies such as Merrill Lynch and the Lehman Brothers have filed bankruptcy and left thousands without jobs.  One day they had everything they needed, and the next day everything was gone.  Lastly banks should really take a deeper look into a customers credit history before giving them a loan for the house.  If you have bad credit history then i think you should not be given thousands of $$$ in a loan.

I think Fannie Mae is doing a great effort to make sure there customers do not get evicted from their homes.  I think other private sectors should adapt to this program or maybe something similar that way these customers don’t end up without a home.

By: Armenis Perez