Sunday, December 14, 2008

Fannie Mae to Let Renters Remain in Foreclosed Houses

At issue in the recent C-Ville story "A Tale of Two Foreclosures" was that the owner of a house hadn't yet notified his tenant of the a foreclosure auction just weeks away.

In recent months, foreclosure rates have exposed as many as 70,000 renters to evictions, through no fault of their own, according to analysts.

Giant mortgage entity Fannie Mae is taking action and will sign leases with the tenants:

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.

Freddie Mac may adopt a similar program. Many banks, including JPMorgan Chase and Bank of America, have policies to evict renters after foreclosures. Renters' advocates hope the governments action will pressure private mortgage lenders to follow suit.

There is no law requiring an owner facing foreclosure to notify tenants.

Read the complete story here.

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