Fannie/Freddie Slow On Evicting Tenants
This is a very interesting article. Although Fannie/Freddie are in the mortgage business are they doing the right thing by being landlords? You can make that call.
Fannie Mae and Freddie Mac, currently the largest holders of U.S. home mortgages, are fast becoming big landlords. But some real estate agents say the firms’ unwillingness to evict tenants from properties they inherit could slow the housing market’s recovery.
Freddie Mac, bowing to pressure from affordable-housing advocates, said Friday it would let renters remain in homes lost to foreclosure. The mortgage-finance company will begin next month offering monthly leases to tenants, following the lead of Fannie Mae, which rolled out a similar policy earlier this month. Both companies said Friday they would halt tenant evictions in February.
The policies are an about-face from the two companies’ previous practice when, like most lenders and mortgage companies, they routinely evicted tenants in homes that fell into foreclosure, even when residents were current on their rent.
Tenant advocates have called on private lenders to follow Fannie and Freddies’ lead, noting that tenants have been swept up in the foreclosure crisis. Lenders should “not be kicking a tenant out in the middle of a recession who has upheld all the terms of their rental agreement,” said Jim Carr, operating chief of the National Community Reinvestment Coalition. “It represents a really important and good-faith effort not to compound the misery of these families.”