Freddie Mac to Let People Stay in Foreclosed Houses

Rental program aims to stop evictions

By Rob Quinn, Newser Staff

Posted Jan 30, 2009 2:44 AM CST

(Newser) – Freddie Mac has forged a first-of-its-kind plan to allow homeowners and tenants to remain in foreclosed homes, USA Today reports. Residents will be charged a market rental rate on leases renewable monthly after their homes have been acquired by the lender. Freddie Mac expects the program to save thousands of families from eviction.

The program is aimed at giving homeowners and tenants more time to find a new place to live and keeping homes occupied to avoid the vandalism and decay that has blighted neighborhoods hit by the foreclosure crisis. Freddie Mac and Fannie Mae are also working on deals to modify mortgage loans to help homeowners avoid foreclosure.

[Images (3)]

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A foreclosed home is taken over by tumble weeds in Glibert, Ariz. (AP Photo/Matt York)

The front porch of an abandoned home in Cleveland. (AP Photo/Jamie-Andrea Yanak)

An abandoned home in Cleveland. (AP Photo/Jamie-Andrea Yanak)

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For tenants, it's a big difference. If this acts as a benchmark for other mortgage servicers, it would be a very positive development. It's a win-win.
- Mark Zandi, an economist with Moody's Economy.com

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Freddie Mac to Let People Stay in Foreclosed Houses