Fannie Mae, the government can now be your landlord

[Modelworks]

I realize that fannie mae has thousands of foreclosures to deal with, but nobody seems to be thinking this through. The new program allows someone who may lose their home to sign it over to the government and then they become a renter with a 1 year lease. Sounds good at first for the homeowner, but who is responsible for the upkeep now ? Who do they call when the roof leaks, the window breaks. Are they expected to do repairs and pay rent ?

The program will be run by HUD, public housing redefined.


http://www.nationalledger.com/artman/publish/article_272628886.shtml

A Fannie Mae rental program will allow one-time homeowners that have allowed their house to go into foreclosure to actually rent the very same house back at "market value" in something called a "Deed for Lease" program. Taxpayer cost is not yet clear.


Fannie Mae execs believe it is a good solution to the thousands of bad loans littering neighborhoods and causing blight as homes sit vacant and begin to deteriorate.

The Wall Street Journal reports: "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."

 

[boomerang]

Do we really want the government in control of this much property in our country? We are watching this nation transform before our very eyes into a form of government we fought against in numerous locations around the globe for the last century. We fought to free others from Communism and now we're embracing it ourselves.

 

[Jaskalas]

Do we really want the government in control of this much property in our country? We are watching this nation transform before our very eyes into a form of government we fought against in numerous locations around the globe for the last century. We fought to free others from Communism and now we're embracing it ourselves.

My thoughts exactly. Think your landlord cannot come into your home and tell you what to do? Maybe the government would have protected you from a private landlord abusing your human rights, but do you honestly expect government to protect you from itself?

We're destroying the great idea behind separation of powers. Of checks and balances.

 

[Ronstang]

Do we really want the government in control of this much property in our country? We are watching this nation transform before our very eyes into a form of government we fought against in numerous locations around the globe for the last century. We fought to free others from Communism and now we're embracing it ourselves.

Unfortunately for the rest of us there are TONS of people in this country that are not capable of controlling their own lives so they naturally think the government needs to do it for them. Ironically it is government that creates most of the problems and then adds insult to injury when they claim they now need to "reform" the things they fucked up to begin with.

 

[Modelworks]

My thoughts exactly. Think your landlord cannot come into your home and tell you what to do? Maybe the government would have protected you from a private landlord abusing your human rights, but do you honestly expect government to protect you from itself?

We're destroying the great idea behind separation of powers. Of checks and balances.

I worry about invasion of privacy with something like this. Where I live in a apartment the manager has the right to come in and do repairs or inspections when I am not there. If the gov owns the home what is to stop them from going into any home they like without a warrant , for those special repairs.

 

[Vic]

/facepalm

The alternative would be to foreclose the property, evict the tenants, and Fannie still owns the house anyway.

 

[Vic]

I worry about invasion of privacy with something like this. Where I live in a apartment the manager has the right to come in and do repairs or inspections when I am not there. If the gov owns the home what is to stop them from going into any home they like without a warrant , for those special repairs.

Mortgage lenders, private or public, already have that right (to ensure the property's upkeep and preservation) once the mortgage goes into default. It is specifically included in the loan documents.

 

[Jaskalas]

/facepalm

The alternative would be to foreclose the property, evict the tenants, and Fannie still owns the house anyway.

Why evict the tenants?

 

[Vic]

Why evict the tenants?

Exactly. With this program, the lender won't have to and will still be able to generate revenue from the asset in the interim.

 

[blackangst1]

My thoughts exactly. Think your landlord cannot come into your home and tell you what to do? Maybe the government would have protected you from a private landlord abusing your human rights, but do you honestly expect government to protect you from itself?

We're destroying the great idea behind separation of powers. Of checks and balances.

+1. /agree

 

[jpeyton]

/facepalm

The alternative would be to foreclose the property, evict the tenants, and Fannie still owns the house anyway.

Sometimes I wonder why you even bother.

 

[EagleKeeper]

What is to happen after the 1 year is up?

Out the door?

Does the renter have an option to purchase the property back (if they can) and under what terms?

 

[jpeyton]

What is to happen after the 1 year is up?

Out the door?

Does the renter have an option to purchase the property back (if they can) and under what terms?

Are any of the options you presented worse than:

foreclosing --> evicting --> letting the empty houses over-saturate the market while producing no revenue

 

[bob4432]

Are any of the options you presented worse than:

foreclosing --> evicting --> letting the empty houses over-saturate the market while producing no revenue

a huge influx of essentially section 8 housing is good for the market too?

man, all these people openly inviting gov into their lives is incredible. as stated earlier, gov created a lot of these problems - not one side but both because gov is a power hungry, narcissistic obese entity. our country goes around the world fighting the type of gov that so many of you are embracing and welcoming into your own life.

 

[Lemon law]

The point being both public and private lenders have a unprecedented number of properties on their hands due to defaulted mortgages.

Worse yet, property values have plumped as a result. Meaning many people who took out such mortgages are now well underwater, owe more than the home is now worth, and thus would be better off walking away.

Meanwhile, what happens to the house, the houses are not selling, the lawns need to be cut, vandals need to be kept away, the house needs to be heated or the pipes burst, property taxers need paid, the public and private mortgage holders simply don't have enough personnel to take care of their glut of defaulted property, and there are simply no easy answers in the public or private sector. Eventually housing prices may recover, but what to do meanwhile.

In terms of the private sector, I remember reading of one mortgage holder who was underwater after his newly purchased home dropped in value and he got downsized in income. So he went to the private lender and asked to renegotiate the mortgage on more realistic terms he could then afford. And the private mortgage holder refused and evicted instead. Six months later the house was sold for $40,000 and they could have gotten 2.5 X that amount from the former tenant. Given the original mortgage was like
$160,000, they lost $120,000 instead of $50,000.

So the wages of greed and stupidity cut in many different directions.

And as a taxpayer that now is on the hook for public lenders, yes I can support cutting the losses rather than increasing losses in a no win situation.

 

[jpeyton]

a huge influx of essentially section 8 housing is good for the market too?

man, all these people openly inviting gov into their lives is incredible.

If you bothered reading the article, you would already know the "huge" number of people opting for this program is in fact an incredibly small percentage of the total foreclosures Fannie is dealing with.

 

[bob4432]

If you bothered reading the article, you would already know the "huge" number of people opting for this program is in fact an incredibly small percentage of the total foreclosures Fannie is dealing with.

i am talking about the people here....

 

[Jhhnn]

Gotta love the whinging wingnuts. Fannie props up the value of real estate, which serves the bankers, investors, and a few homeowners, and they rip off on the old song and dance about intrusive govt, yadda, yadda, yadda...

It's often the same voices that were supporting the Bush admin while the fourth amendment went out the window in pursuit of the ebil Terrarists! and went along with the manipulation of the market that created this mess in the first place...

Not that they'd notice, cranio-rectal infarctions being what they are...

 

[sciwizam]

Gotta love the whinging wingnuts. Fannie props up the value of real estate, which serves the bankers, investors, and a few homeowners, and they rip off on the old song and dance about intrusive govt, yadda, yadda, yadda...

It's often the same voices that were supporting the Bush admin while the fourth amendment went out the window in pursuit of the ebil Terrarists! and went along with the manipulation of the market that created this mess in the first place...

Not that they'd notice, cranio-rectal infarctions being what they are...

I'm straining to see the difference between the 2 admins regarding Patriot Act and if you think it was only Bush admin's policies that created the mess, I got a bridge to sell.

 

[cubeless]

call this 'cash for squatters'... watch for the stats... most of these things will never see a payment made... hopefully the recips will at least not destroy the property any worse than they probably already have...

 

[bob4432]

how is fannie propping up anything? now people won't buy, they will just rent a house which won't lead to the real estate market going up or probably even staying where it is. if anything the homes around these hard hit areas will still decline in value because of all the govt homes surrounding them.

as far as administration support, i hardly supported bush in his 1st term and questioned the lunacy during that time, didn't vote for him in his 2nd (who could have - patriot act, iraq???, etc) and didn't vote for the current regime - it is all the same so i guess that is a moot point just the current people are much more brazen than the past, and people for some unknown reason love them for it.

the US is turning into a welfare state before your eyes....

 

[CPA]

Do we really want the government in control of this much property in our country? We are watching this nation transform before our very eyes into a form of government we fought against in numerous locations around the globe for the last century. We fought to free others from Communism and now we're embracing it ourselves.

Housing is a right....a natural resource....the right thing to do.....insert whatever excuse the left is going to use to justify this nonsense.

 

[CPA]

Gotta love the whinging wingnuts. Fannie props up the value of real estate, which serves the bankers, investors, and a few homeowners, and they rip off on the old song and dance about intrusive govt, yadda, yadda, yadda...

It's often the same voices that were supporting the Bush admin while the fourth amendment went out the window in pursuit of the ebil Terrarists! and went along with the manipulation of the market that created this mess in the first place...

Not that they'd notice, cranio-rectal infarctions being what they are...

Let's just have the govt prop up everything....homes, autos, finance, health insurance, whatevers next on the list....

 

[Corn]

Exactly. With this program, the lender won't have to and will still be able to generate revenue from the asset in the interim.

LOL this is a completely silly "feel good" program destined to fail and cost the agency orders of magnitude more than had they simply repossessed and sold.

If the "renter" could make the payments on the property, there would be no foreclosure to begin with, therefore how many "renters" will still end up not making any payments. Next problem is that FNMA will still have to market the property for eventual sale, however, since there are now tenants leasing the property for up to a year, you are removing a significant portion of potential buyers who are looking to purchase homes to occupy themselves.

The only positive I can see from this is that it will negate the redemption period and possibly reduce vandalism and theft from the property by the "owners". A much better option would be to simply give the owners cash for the deed and waiver of the redemption period.

 

[Jhhnn]

how is fannie propping up anything?

The lameness in this thread is almost astounding. As you point out, prices are depressed, rightfully so, because supply exceeds actual demand. No more artificial demand based on liars' loans and teaser rate ARM's, no demand for MBS based on false AAA ratings, either. Our former Administration and their supporters allowed housing to become a speculative market.

If the FRB and Treasury dept hadn't stepped in, many of America's banking giants would be defunct, in receivership, their holdings selling for a nickle on the dollar. Credit would be non-existent. The actual selling price of housing would fall through the floor, and many homeowners would simply abandon their exorbitant payments for (much) cheaper rent from people who had cash to buy foreclosed properties, rent them out at affordable rates.

That can still happen if too much real estate comes onto the market too quickly. Fannie's acting as a landlord is one of many attempts to prevent that from happening. How well it'll work out is anybody's guess.