Good News for Rentersby Tim Manni
Fannie Mae agreed yesterday to become a “national landlord,” by supporting the first initiative designed to rescue renters facing eviction all across the country. The mortgage giant will sign month-to-month leases for tenants who live in Fannie-owned, foreclosed properties.
Supporters praised the GSE for aiding renters who have continually held up their end of the bargain against landlords who have not. Fannie expects the program to initially help 4,000 renters. According to analysts, approximately 70,000 renters faced eviction in recent months, despite keeping up with monthly payments.
Fannie’s new agreement will likely only benefit the fraction of renters who live in Fannie-owned properties. Can this program entice private banks to follow suit?
“We’re not in the business of managing rental properties, and we’re not in the business of being a landlord,” said Thomas Kelly, a spokesman for JPMorgan Chase, which owns about two million loans. “Clearly the renter is caught in the middle in cases like this. When a property is in foreclosure, we follow the law.”
Some argue that the landscape of the housing has clearly changed, and banks need to adjust:
“If your loan is owned by Fannie Mae, you get to stay in your home. If your loan is owned by someone else, you’re on the street,” said Mr. Taylor of the National Community Reinvestment Coalition. “These banks need to realize they’re in the property management business now, whether they like it or not.”
Since the details of the program are still being ironed out, we don’t yet know how much this initiative will cost Fannie, or just how involved they will be as the actual landlord. Will James Lockhart or another member of the FHFA staff return your call when you complain the toilet is backed up or the roof is leaking? According to the New York Times, a Fannie spokesperson said the GSE would even pay for the tenant to move if they didn’t wish to remain in the foreclosed property. The FHFA expects Freddie to update their policy on renters soon enough.
Parting Questions: Should responsibility fall upon the government to save renters? Are renters at all responsible when their occupied residence is foreclosed?