New Program that Could Affect Loan Modifications

Posted on November 06, 2009 by admin

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Fannie Mae, the program chartered by Congress to provide stability and affordability in the housing and mortgage market, announced a new program for homeowners facing foreclosure. The Deed for Lease program is designed to allow a qualifying homeowner remain in their home by signing a lease in connection with a voluntary transfer of the property deed back to the lender. This will provide another option for people facing foreclosure. It will eliminate some of the uncertainty and keep families in their homes.

The move by Fannie follows a similar effort by Freddie mac that began offering month-to-month leases to owner-occupants who had lost their homes to foreclosure. The Fannie Mae program differs in one important respect: Fannie’s foreclosed homes won’t be listed for sale. In February, both companies began allowing tenants whose landlords had lost their properties to foreclosure to sign month-to-month leases.

Eligibility:

* Income must be sufficient to cover rental payment of no more than 31% of gross income.

* Occupants must have kept the property in good condition.

* The number of occupants must be appropriate for the home ; in compliance with local laws and homeowner association rules.

* Property must be used as a primary residence.

In-Eligibility:

* If the current market rent is greater than 31% of the occupant’s monthly gross income.

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