Government-sponsored enterprises Freddie Mac and Fannie Mae will extend their suspension of evictions triggered by foreclosures on single-family properties with GSE-owned mortgages through Feb. 28.
Freddie Mac last week announced it would follow Fannie Mae's lead and implement a rental policy in which qualified owner-occupants and tenants will be offered leases so that they can rent the properties on a month-to-month basis after foreclosure.
‘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," says David M. Moffett, CEO 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."
Under Freddie Mac's REO Rental Option, leases will be offered to current renters on a month-to-month basis at market rents or the rent amount they were paying prior to foreclosure – whichever is less. The rent for former owner-occupants will be the market rent, which will be determined by the property management firm Freddie Mac contracted to manage the program.
"This decision will benefit both neighborhoods and hardworking renters who pay their rent on time and were facing eviction through no fault of their own," says Senate Committee on Banking, Housing and Urban Affairs Chairman Sen. Chris Dodd, D-Conn., about Freddie Mac's rental program. "I am pleased that Freddie Mac is complying with the law and protecting renters from the devastating effects of foreclosure."
SOURCES: Fannie Mae, Freddie Mac, Office of Sen. Chris Dodd