Fannie Mae has announced that they will offer people facing foreclosure the chance to stay in their homes by giving them the option of renting the property from Fannie Mae for up to one year. After that year it can still be extended on a monthly basis.
What does this mean for you?
First understand this is only for Fannie Mae backed loans. The confusion comes in when borrowers don’t understand what kind of loan they initially have. To find out if you have a Fannie Mae loan go to Fannie Mae Loan Lookup. If you are facing foreclosure you now have another option. The first option is the Making Home Affordable Plan. This to me is the best option because it puts you in a position to restructure your loan at a lower rate. The details to the second option which is renting the property is not clear. They would continue the foreclosure process and just allow you to remain in the home as long as you can pay rent, which would probably be the mortgage payment that you are already struggling with. The home would still be placed on the market for sale. There are no details on how soon you would need to vacate the property after it sells. They do offer financial assistance to move to new housing if you choose not to remain in the property.
What does this mean for the community?
This means that there is not another vacant house in the neighborhood set for vandalism. It also helps the family from being displaced immediately and gives them more time to secure safe and affordable housing.
Which choice is best for you?
If you can afford to pay the rent for the property, then you can afford to modify your property and still own it. With either scenario you have to pay to stay in the property, therefore you must have some kind of income to qualify for either option. With modification they will adjust the payments to 31% of your income. With the rental option you pay what Fannie Mae says the rental property is worth for your area. You will basically be renting the property from month to month and subject to eviction laws should you not pay your rent.
Way your options and make an educated decision when faced with these choices. Remember the easiest option may not be what is best for you.
