Lost in the breaking news of the day was an announcement out of Fannie Mae in Washington that most certainly will be of interest to those struggling with the possibility of foreclosure, including many of the people, perhaps, whom I’ve profiled on the The Unemployed series.
The new program is designed for borrowers who do not qualify for or have not been able to sustain other loan-workout solutions, such as a modification. Under Deed for Lease, borrowers transfer their property to the lender by completing a deed in lieu of foreclosure, and then lease back the house at a market rate.
To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance may also be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31% of their gross income.
Some of the qualifications can be found here.
Borrowers cannot have 12 or more past-due payments on their mortgage. And they must have made at least three payments since the loan was first taken out–or since the last time it was modified. Borrowers can’t be in the process of declaring bankruptcy.
People in danger of foreclosure should call their lender. If you do, please let me know how it works out for you.
And while I’m at it, I’m looking for more people who are struggling with unemployment (or unemployed but not struggling, even). Contact me here.