Renters Can Stay in Foreclosed Properties

For those that are renting a home or apartment, the news that the property is in foreclosure can be incredibly disruptive. The mortgage crisis in the United States has seen many property owners default on mortgages and rental investments have been no different. I some cases, owner’s rented their home rather than selling in a down market. Depending on the circumstances, some of these rentals were unsustainable and the property fell into foreclosure. Rentals that are owned by investors have not been exempt from the mortgage breakdown. Residential and commercial rentals have been affected by the financial mess and even multi-unit buildings have been added to the lists of troubled properties.

The tenants in these properties are usually requited to vacate after being given notice by the lending institution. Tenants that are forced to move find themselves in a position where they may have leave their community, pull their children from schools and even travel further to their jobs. On January 15, 2009, Property Wire reported that rather than having homes sit empty and creating unnecessary hardship for renters, the American Lender, Fannie Mae has altered their procedures. Tenants are able to remain in their homes and re-negotiate rental terms.

 

Rentals that are financed with other lenders are still subject to the traditional procedures of foreclosure. Tenants must vacate within a set time-frame once notice is given. Residents of a property in default can contact the legal representative of the property in order to determine if the lender will consider an agreement.

 

The concept of minimizing upheaval within communities affected by the mortgage issues is an initiative supported by the government backed lender, Fannie Mae. Other lenders are not obligated to duplicate the process but they do have the option to match procedures and guidelines. This action appears to be a step in the right direction an if modeled, could have a positive impact on the housing situation across the US.