This is a program that makes a world of sense for real estate foreclosures.
Freddie Mac, even after foreclosing on a home, now offers the former homeowner the chance to either lease the home–or buy it back as long as the occupant is employed and not engaged in a bankruptcy.
This keeps the home occupied by someone vested in the property, helps preserve neighborhood values and will likely eliminate natonal foreclosure problems much more quickly. And it’s also pretty cool that some homeowners get to stay in their homes without the disruptions that go with moving.
Freddie Mac gets it.
Freddie Mac hires representatives to contact owners of foreclosed homes to see if they would like to remain–and possibly refinance into something more affordable.
And this is done before the foreclosure deed is recorded. There is now a window of opportunity for homeowners to remain in their homes without the embarrassment of tacky foreclosure signs in the yard–=and the pain of moving. We’ve known about their leaseback offer:
Finally, in those cases where foreclosure proves unavoidable, Freddie Mac still works to keep families in their homes. We have suspended evictions triggered by foreclosures, offering qualified former owner-occupants and tenants leases so they can rent the properties on a month-to-month basis after foreclosure.
We now hear from good sources that Freddie Mac is also offering some homeowners the opportunity to refinance their homes after the foreclosure– before the foreclosure deed is recorded.
Kudos to Freddie Mac!
Roberta: You are correct... I have actually met with several home owners and offer this option. These homes are foreclosed and the deed has not been recored. They must qualify for this option.
Hi Roberta,
Interesting news from Freddie Mac, but I have a question for you. You say they buy it back, I'm assuming it's a fmv at that point, correct? So why not just reduce the principal loan downward prior to the foreclosure? I saw your comment about a re-fi, why wouldn't they just reduce the loan, seems to me like it would also save foreclosure fees among other things.
There must be some reason to do it the way they are...maybe impacting asset values, yet non-performing assets, who knows?
Btw, great seeing you at rebarsf!
Roland: I have seen the offer in writing and am glad to see that you have as well.
Lynda:
Great seeing you as well! Learned much from our discussions.
I hate to sound cynical, but it appears Freddie Mac is demolishing all secondary liens at foreclosure and is offering to re-fi or modify a simple first. They are also offering lease opportunities.
Like you, I am wondering what impact this has on lender's portfolios and asset values, but applaud the positive impact it might have on endangered neighborhoods and communities.
Roberta,
You are so right, that's something I didn't think about. As for the lease opportunities, that really surprise me, I hope it helps out some consumers.
Losing a home is obviouly difficult for everyone, it's also something impacting children for years to come. My own father was a product of that experience during the depression, something he never forgot, paying off his mortgage was always a goal.
Lynda,
Like your Dad,I believe there will be many in this generation that will want, above all, a home that no one can take from them--a home that is free and clear.
Few will escape without memories--and scars.
Roberta: Yes I have seen this in writing as I have delivered these such offers to the front door of these foreclosed homes. Now until my most recent assignment, there was a lease option if the home was tenant occupied. This lease option was for the tenant or the home owner.
Rolands post sent me here.
Great news. I wish Fannie would do it too.
Any idea if they are considering this?
Roland:
Watching this closely--and wondering about results. Are you seeing agreements being reached between Freddie Mac and borrowers post foreclosure?
Missy:
I would imagine that Fannie Mae is looking over Freddie's shoulder. I sure would!
Roberta: I have seen some where the homeowner refused to complete the required documents as them didn't believe the offer. I have one now who is completing them now. Once we submit the required documents, it is a waiting period. If approved There is a package to get signed by the homeowner. I have not had any of these yet. Time will tell.
Roland: Keep us updated! This just might become a trend to help stabilize neighborhoods.