FANNIE ALLOWS RENTERS TO REMAIN IN FORECLOSED HOMES

Fannie Mae announced last Monday that it is finalizing a plan to help renters stay in their homes even if their landlord enters foreclosure.

The mortgage giant said it's working on a national policy to allow renters living in foreclosed properties — and who can make their rental payments — to sign new leases with Fannie while the property is up for sale. Or they could get cash to help move into a new home.
Sibling company Freddie Mac aims to have a similar plan in place by early January.
Many renters have been caught in the crossfire between landlords who have collected rents and their lenders who have not received payments on the underlying mortgages. The goal of this program is to provide such tenants some stability and not evict them as a result of another's foreclosure.

The two mortgage giants own or guarantee about half of the $11.5 trillion in outstanding U.S. home loan debt. The government seized control of the pair of companies in September.
Last month, Fannie and Freddie suspended foreclosure sales on occupied single-family homes and halted evictions of homeowners from those properties through January 9. Fannie said the move has enabled an estimated 7,000 to 10,000 families to remain in their homes through the holidays.

It is hoped that this new policy by Fannie Mae will serve as a model to private lenders and state legislators considering actions to assist renters who are being immensely burdened by the foreclosure crisis.