Freddie Mac on Friday plans to announce a first-of-a-kind plan that lets homeowners and tenants temporarily stay in homes in foreclosure by renting them back, an effort to stop many of the sudden evictions that have come along with the housing crisis.
The program will let thousands of qualified former homeowners, as well as families renting from landlords, enter into a monthly lease on their homes after they have been acquired by Freddie Mac through foreclosure.
Freddie Mac officials expect the program to help about 8,600 families in 2009.
The program gives homeowners and renters more time to find a new place to live and also keeps homes occupied. That’s a plus for neighborhoods where numerous foreclosures have led to empty, unmaintained, vandalized properties.
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Loan Modification, Mortgage, Uncategorized
foreclosure, freddie mac, renters
The Washington Independent has a great article about our not so friends Fannie Mae and Freddie Mac. According to the article, when you get a Loan Modification through either of the two, you wave all rights to, well anything. Including rights you had with the original mortgage - before the Loan Modification.
But also included in the Fannie agreement is a provision stating that “borrower has no right of set off or counterclaim or any defense to the obligations of the Note or Security Instrument.” The waiver is part of the borrower requirements that must be signed for the loan modification. Fannie Mae’s sample version is available on one of its websites; the Freddie Mac agreement, which has similar language, can be accessed only by servicers. The agreements were designed by Fannie and Freddie.
In plain English, the waivers mean a borrower can’t sue the lender who originated the mortgage if the loan modification goes bad, or for any other lending abuses concerning their loan, Gordon said. Such waivers are regularly required in the settlement of class action suits, but they haven’t been included as a matter of course in individual loan modifications agreements until lately. “I find this outrageous,” she said.
Gordon’s not the only one. Forcing borrowers to sign away their legal rights to sue in order to get loan modifications became an issue this summer, when Frank angrily denounced the practice at a House Financial Services Committee hearing. Frank also told servicers to stop using the waivers. The hearing was called to find out why more loan modifications weren’t getting done and to look at the role of mortgage servicers in the foreclosure crisis. Some advocates cited the increasing use of waivers by servicers and major lenders such as Countrywide as one of the problems.
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Loan Modification
Fannie Mae, freddie mac
