Freddie Offers Leases, Delays Evictions Furtherby Tim Manni
Freddie Mac announced plans on Friday to offer owner-occupants and tenants of Freddie-owned properties month-to-month leases as tool to limit foreclosures.
“First and foremost, Freddie Mac’s REO Rental Option is intended to help cushion the impact of foreclosure on families who own or rent homes with Freddie Mac-owned mortgages,” said David M. Moffett, Chief Executive Officer of Freddie Mac. “At the same time keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market.”
The program follows Fannie’s similar initiative announced back in December. To qualify for Freddie’s policy, “current tenants and former owner-occupants must be able to demonstrate they have adequate income to pay the monthly rental amount.”
Can Freddie really rely on owner-occupants to pay a monthly-rent check if they were unable to keep up with a monthly-mortgage payment?
At the same time Freddie has also announced that they will extend their suspension of evictions until the end of February.
Not everyone is praising Freddie’s new policies:
However, Freddie Mac hasn’t explained how tenants will be notified of the policy and hasn’t committed firmly enough to halting evictions, said Amy Marx, a staff attorney at Connecticut-based New Haven Legal Assistance.
“The only thing that Freddie Mac has agreed to do is to not send the sheriff to forcibly remove tenants,” Marx wrote in an e-mail.