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Fannie Mae won't evict renters

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Fannie Mae won't evict renters

Postby TenantNet » Wed Jan 14, 2009 5:37 pm

Fannie Mae won't evict renters
Tenants of foreclosed homes can stay if up to code

By Inman News, Wednesday, January 14, 2009.
Inman News
http://www.inman.com/news/2009/01/14/fa ... ct-renters

Fannie Mae will allow qualified renters to sign month-to-month leases and stay on in homes it forecloses on -- without requiring a security deposit, credit check or payment history -- while it markets the homes for sale.

The new National REO Rental Policy is intended to limit the disruption to the lives of renters when their landlord is foreclosed on, and "bring a measure of stability to communities impacted by high foreclosure rates," said Fannie Mae Chief Operating Officer Michael Williams in a statement.

Freddie Mac is reportedly developing a similar policy. Fannie Mae's program applies only to renters -- not the owner of the property or their immediate family -- and requires that homes meet state laws and local code requirements for a rental property.

All types of single-family property are eligible for the program, including two- to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing. Properties with loans insured by FHA will require approval from the Department of Housing and Urban Development (HUD).

Rents will be set at market rate by reviewing local comparable rents, conducting a neighborhood survey, or using "other relevant indicators," Fannie Mae said. Properties will be managed through a real estate broker or a property management company, which will be required to coordinate property repairs and respond to any property safety issues.

After a foreclosure is complete, renters will be offered a "Cash for Keys" incentive payment to vacate the property, or have the option of signing a new month-to-month lease with Fannie Mae.

In late November, Fannie Mae and Freddie Mac suspended the process of evicting about 16,000 troubled borrowers or selling their homes while they implemented a streamlined loan modification program intended to prevent foreclosures (see story).

Fannie Mae announced last week it was extending the suspension of foreclosure sales and evictions through Jan. 31. The company said Tuesday that the new National REO Rental Policy will be fully in place by the time the suspension is lifted.

=================

FANNIE MAE News Release
http://www.fanniemae.com/newsreleases/2 ... s+Releases

January 13, 2009

Fannie Mae Announces National REO Rental Policy
Renters in Fannie Mae-Owned Foreclosed Properties
Eligible to Stay in Their Homes


WASHINGTON, DC -- Fannie Mae (FNM/NYSE) today announced the establishment of a new National Real Estate Owned (REO) Rental Policy that will allow qualified renters in Fannie Mae-owned foreclosed properties to stay in their homes. The company currently has an eviction suspension in place through the end of January which will allow for the new policy to be fully operationalized prior to the suspension concluding.

"Renters in foreclosed properties have often been a casualty of the foreclosure crisis the country is facing," said Michael Williams, chief operating officer of Fannie Mae. "This policy will allow qualified renters to remain in Fannie Mae-owned properties should they choose to do so, mitigate the disruption of personal lives that foreclosures can cause, and help bring a measure of stability to communities impacted by high foreclosure rates."

The new policy applies to renters occupying foreclosed properties at the time Fannie Mae acquires the property. Renters occupying any type of single-family property will be eligible including residents of two- to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing. Eligible renters will be offered a new month-to-month lease with Fannie Mae or financial assistance for their transition to new housing should they choose to vacate the property. The properties must meet state laws and local code requirements for a rental property.

While the company markets the properties for sale, Fannie Mae will manage the properties through a real estate broker or a property management company. The company will not require security deposits to be posted in connection with this program.

Renters in the foreclosed properties will be asked to pay market rate rent under the new leases. Rates may be determined by reviewing local comparable rents, conducting a neighborhood survey, or through other relevant indicators. Rates will also be subject to any legal rent control restrictions. The company will review each instance where the market rate may require a tenant to pay additional rent and will work to reach an equitable resolution.

On behalf of the company, property managers are contacting renters in Fannie Mae-owned foreclosed properties to notify them of their options.

For more information, please review the policy FAQs at fanniemae.com.


=======================================

FANNIE MAE’S NATIONAL REO RENTAL POLICY FAQS

Fannie Mae’s National REO Rental Policy allows renters in Fannie Mae-owned, single-family foreclosed properties the opportunity to stay in their homes by signing a new month-to-month lease with Fannie Mae.

Who does the new policy apply to?

The new policy applies only to renters occupying the home at the time of foreclosure or deed-in-lieu of foreclosure. It does not apply to mortgagors or their immediate families.

Tenants occupying any type of single-family property will be eligible including residents of two- to four-unit properties, condos, co-op, single-family detached homes, and manufactured housing, where the homeowners associations (HOAs) do not prohibit rentals. The policy applies to all renter-occupied single-family Fannie Mae REO; however, with regard to properties where the loans were insured by FHA, approval from the Department of Housing and Urban Development (HUD) will be required.

What are a renter’s options?

After the foreclosure is complete, renters are offered the opportunity to either accept an incentive payment to vacate the property (Cash for Keys) or sign a new month-to-month lease with Fannie Mae.

Can any renter sign a lease with Fannie Mae? What are the restrictions?

In order for a lease to be offered, the property must meet state laws and local code requirements for a rental property. Renters must be occupying the property at the time of foreclosure. Fannie Mae will not require payment histories or credit checks.

If a property or potential renter does not meet these requirements, Cash for Keys will still be offered as an alternative.

How will rent be established?

Renters will be charged market rate rent under the new lease. Market rates may be determined by reviewing local comparable rents, conducting a neighborhood survey or through other relevant indicators. No security deposit will be required. The company will review each instance where the market rate may require a tenant to pay additional rent and will work to reach an equitable resolution.

What if a property is qualified as Section 8 or under other rent control?

Fannie Mae will accommodate Section 8 and rent control concessions as long as the proper documentation is provided.

Will the property be for sale?

Yes, the property will be marketed for sale and may undergo repair or rehab while occupied with a renter under a Fannie Mae lease. If the property sells, the lease will transfer to the new owner.

How will the property be managed?

Fannie Mae will manage the property through a real estate broker or a property management company. The real estate broker or property management company will coordinate property repairs and respond to any property safety issues as appropriate.

How does a renter know if they are in a Fannie Mae-owned foreclosed property?

Property managers will make contact with occupants to notify them of their options by visiting the property directly or, if occupant is away, by leaving an information flyer with contact details for more information.

Does the policy apply in all locations? Yes. Leases will be offered anywhere Fannie Mae does business and has eligible properties and tenants.

Who should I contact for more information?

Contact Fannie Mae’s Consumer Resource Center at 1-800-7FANNIE (1-800-732-6643) for additional information on the policy.
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