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Los Angeles Times: Fannie Mae to allow borrowers in foreclosure to lease back homes

November 6, 2009

Fannie Mae to allow borrowers in foreclosure to lease back homes
Los Angeles Times
By Alejandro Lazo

...Mortgage giant Fannie Mae said Thursday that it would throw a lifeline to some people losing their homes to foreclosure by allowing them to lease those properties back for up to a year at market rental rates. The move is the latest in a series of steps by lenders trying to manage inventories of foreclosed homes on their books in an attempt to keep a wave of properties from slamming a housing market that has shown some signs of recovery. The news came as Fannie Mae reported a net loss of $18.9 billion in the third quarter ended Sept. 30, compared with a $14.8-billion loss in the second quarter and a $29.4-billion loss in the third quarter last year...

..."This is a very wise business decision because these loans are underwater, and they are not going to get all of the money," said Richard Green, director of the USC Lusk Center for Real Estate. "Fannie has an incentive to keep the homes reasonably maintained because they are going to want to sell them one day."...