December 23, 2008

Fannie Mae gets into property management while the banks say no

One of the sad and untold stories of the housing crises. Even if you have been paying your rent to the owner of the home you have rented, each time, on can be evicted. Many owners that are renting out their home are behind in mortgage payments and you, the renter have no idea. Once the bank takes possession they will evict you. They have the right,even though you have been a tenant in good standing. Banks will tell you, they are not in the business of being landlords or property managers. They want the house empty, because they think it will sell faster.

Fannie Mae is the owner of 67,500 properties in foreclosure. Fannie Mae recognizing the difficulty of good people who pay on time, being forced out into the streets will sign new leases with renters living in their foreclosed properties. This could help as many as 75,000 renters stay in homes owned by Fannie Mae.

According to the NY Times, it is the first nationwide effort to provide widespread relief to renters ensnared by the unfolding mortgage crisis, and it will effectively transform Fannie Mae — a government-controlled mortgage finance company — into a national landlord.

Banks as a landlord would be problematic. Property management firms are often family owned business and they couldnt stand up to that kind of competition. Given how poorly the banks have performed as far as reasonable business decision making, I would like to see smaller management companies be offered the business should it be decided that tenants in good standing cannot be evicted just because an owner got into financial trouble.

Thanks for Reading

Howard Bell

A web site of over 450 articles related to real estate focused primarily on property management.

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