Fannie Helping Renters Stay in Foreclosed Homes

Washington, Dc, Dec. 16, 2008--Loan giant Fannie Mae said Sunday that it would sign new leases with renters living in foreclosed properties owned by the company so they can avoid eviction.

It is the first nationwide effort to provide widespread relief to renters caught by the mortgage crisis, and it will effectively transform Fannie Mae — a government-controlled mortgage finance company — into a national landlord.

It may also increase pressure on private lenders to establish similar programs and on lawmakers to pass renter relief.

“There are renters all around the country who have been holding up their end of the bargain and paying their rent faithfully, but the landlord got into trouble, and so the renter is now unfairly facing eviction,” said John Taylor, president of the National Community Reinvestment Coalition, a consumer advocacy group.

In recent months, skyrocketing foreclosure rates have exposed as many as 70,000 renters to evictions, even though many never missed rent payments, according to analysts who track housing data. In many cities and states, renters can be evicted after their home goes into foreclosure, regardless of how long their lease stretches into the future.

Fannie Mae’s initiative is expected to initially benefit as many as 4,000 renters living in foreclosed homes owned by the company.

Fannie Mae owned 67,500 properties in foreclosure at the end of September, according to the company’s most recent filings.