Fannie Mae Announces Deed-for-Lease Program...A Good Idea?

Announcement 09-33 introduces Deed-for-Lease™, a new option for qualified borrowers facing foreclosure (or their tenants) to remain in their home by signing a lease in connection with the voluntary transfer of the property to the lender through a deed-in-lieu of foreclosure transaction.

Am I the only one who thinks this is a bad idea? Does this not put more bad debt on the banks, thus making it harder for qualified borrowers to get a loan, encourage defaulting, and more importantly, lead to the banks controlling the real estate market altogether? The banks certainly will need to get their acts together to implement this program considering they have to first try to institute another form of modification with the borrower first. If the borrower, as a tenant, still needs to be within the 31% ratio (as with modification), why not just modify the loan payment to that same payment so that the owner can keep the home? I would suggest that the banks simply want to hold onto the home as long as possible to recoup their loss. Isn't that exactly what the homeowners are asking to be able to do by instituting a modification? Seems that the banks have all the control.

Whether you support this program or not, I would love to hear your opinion.

For more information on this program, go to www.efanniemae.com.

On a side note, for those who are having a difficult time getting the bank to work with you on a modification (in Nevada), don't forget that Nevada instituted the Foreclosure Mediation Program several months ago. If you default on your loan and receive a Notice of Default after July 1, 2009, you have thirty (30) days to file for forced mediation with the Nevada Supreme Court. This may ultimately go hand-in-hand with this new Fannie Mae Deed-for-Lease™ program (if you have a Fannie Mae loan).

For more information on the Foreclosure Mediaton Pro... go to www.nvsupremecourt.com.

Many homeowners are not officially receiving a copy of their Notice of Default. To see if you have a NOD filed against you, go to your local county recorders office or website. The lenders are conveniently not sending them along with the Election/Waiver of Mediation form. Click here, to sign up and view your recorded documents fom Washoe County Recorder.

ElectionWaiverofMediatio...

Source: www.efanniemae.com