keep in mind that this comes on the heels of Freddie / Fannie losing $18+ billion dollars in the latest quarter and requesting billions of additional US taxpayer dollars for yet another bailout ... see
(snip)"Fannie to Rent to Owners in Foreclosure
Fannie Mae will allow homeowners facing foreclosure to stay in their homes and rent them for as long as a year, as part of the government's latest effort to help troubled borrowers, while keeping more foreclosed properties from hitting the housing market.
The "Deed for Lease" Program lets borrowers who don't qualify for loan modifications transfer their property to Fannie Mae in exchange for a lease. Borrowers-turned-tenants will pay market rents, which in most cases are lower than the cost of mortgage payments, and might be offered extensions when their leases expire.
Fannie Mae wouldn't say in its Thursday announcement how many homeowners it expects would take advantage of the program. The company acquired 57,000 properties through foreclosure during the first half of the year.
Borrowers have to demonstrate they can't afford their current mortgage, but can pay the rent. The borrower's mortgage servicer has to show the borrower didn't qualify for a loan modification"(snip)
(snip)"The move by Fannie follows a similar effort by Freddie Mac that began offering month-to-month leases to owner-occupants who had lost their homes to foreclosure. The Fannie Mae program differs in one important respect: Fannie's foreclosed homes won't be listed for sale. In February, both companies began allowing tenants whose landlords had lost their properties to foreclosure to sign month-to-month leases."(snip)
(snip)"Separately, Fannie Mae said Thursday it would need an additional $15 billion from the U.S. Treasury after it posted an $18.9 billion net loss for the third quarter, as loans made to prime borrowers deteriorated at a faster clip. That infusion would bring the total cost so far of Fannie's bailout to $61 billion.
In the past year, the government has invested more than $110 billion in Fannie and Freddie, and it has pledged to invest as much as $200 billion in each company to keep them afloat."(snip)
from
Arguably, this plants the seeds for a huge new de-facto taxpayer funded Section 8-esque subsidized housing program ... but for 'their own' houses ! Renting / leasing to the delinquent homeowner results in a huge ongoing cash flow loss to Fannie / Freddie, prevents Fannie / Freddie from recovering any additional cash via sale of the property, etc. ... with these losses ( representing the difference between monthly mortgage payments due versus monthly rental / lease cost ) being dumped onto the US taxpayer via a series of never-ending bailouts.
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