Fannie Mae Announces "Lease for Deed" Program

[Isabel]

Calculated Risk: Fannie Mae Announces "Lease for Deed" Program

Fannie Mae to rent out homes instead foreclosing - National Business - MiamiHerald.com

What have people heard about this?

[nativelasvegan]

Thank you for posting this information. Fannie Mae is now in the real estate business everyone. God bless them.

[Slim Shavings]

NOW when China forecloses on our debt Fannie can have the deeds readily available. I cannot in the farthest reaches of my mind think people would go for this.

[MZWITHHOPE]

They can lease it for 31% of your gross but cannot modify your loan? I am sure we can all find rentals for a lot less than 31% of our gross. they seriously don't know what they are doing!

[Believe]

Originally Posted by Slim Shavings

NOW when China forecloses on our debt Fannie can have the deeds readily available. I cannot in the farthest reaches of my mind think people would go for this.

Great comment, Slim. After seizing our homes, they're going to beg us to pay for them anyway? Nice try.

[Slim Shavings]

Hey government I need a new roof. Hey government can I add on a garage. put in a new stove. hey government can I wipe

[59Cottage]

Originally Posted by Slim Shavings

Hey government I need a new roof. Hey government can I add on a garage. put in a new stove. hey government can I wipe

Exactly. Now go paint all the walls stark white and NO PETS!

[snapple candy]

Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31% of their gross income.

I wonder who sets the "new market" rental rate?Sht, I think my gross income just dropped.

[auroraproblem]

Calculated risk?!? I don't see where there is much risk for the investor. Keeps someone in the house that was not going to be there any longer. Yard is mowed, house not abandoned, furniture in house (easier showing to buyers), rent is collected, off setting taxes and insurance costs, all this while waiting for the market to improve so that the home can be sold later.

Lets not forget as well, this is one less property in the neighborhood with a stick in the yard (thus keeping inventory a bit lower).

I don't see much risk for the investor at all, the risk is in the lease holder who eventually will loose the place to live and only forestalls the process of moving on with their life and delay what could be an emotional process of letting go the home.

[huz715]

the goverment alwasys do more for bank than borrower.

I only need pay 15% of my gross income to live in brand new luxurious
apartment at across street.
Why we pay much higher rent to stay in bank's house?

We want keep our house, not rent.

[snapple candy]

Aurora,
Good point about emotional process of letting go. Myself, i am considering a strategic walk away since I have crunched the numbers and it will be at least 10 years before I ever break even. It also involves a strategic move-away out of the region/state timed with kids graduating. If I can avoid having to move an entire household and kids for a year at the same rent I can get down the street, Id prefer to stay in this. I am weighing all the options. I dont like the fact the lender gets a good deal by me staying in the house, keeping it up after they have jerked me around for so long.

I think there maybe a downside to me or anyone considering this route if I was to consider a deed for lease for a period of time. If bank agrees to write off the HELOC and the first in exchange, i think I would have to pay taxes on the write off amount if it is reported. Money I dont have. I dont care about my credit since its shot. If they foreclose, they cant cant tax me on that. Also in a non-recourse state. This may be something to consider in forclosure vs deed in lu or deed in lease evaluation.

[auroraproblem]

Originally Posted by snapple candy

Aurora,
Good point about emotional process of letting go. Myself, i am considering a strategic walk away since I have crunched the numbers and it will be at least 10 years before I ever break even. It also involves a strategic move-away out of the region/state timed with kids graduating. If I can avoid having to move an entire household and kids for a year at the same rent I can get down the street, Id prefer to stay in this. I am weighing all the options. I dont like the fact the lender gets a good deal by me staying in the house, keeping it up after they have jerked me around for so long.

I think there maybe a downside to me or anyone considering this route if I was to consider a deed for lease for a period of time. If bank agrees to write off the HELOC and the first in exchange, i think I would have to pay taxes on the write off amount if it is reported. Money I dont have. I dont care about my credit since its shot. If they foreclose, they cant cant tax me on that. Also in a non-recourse state. This may be something to consider in forclosure vs deed in lu or deed in lease evaluation.

Well congrats, more so for coming to a decision that considers your families future. That is the only thing that matters, simply what is best for you and your family. Treat it as a business decision if you can, we all know many of us are in this situation because we never thought about that going in, now is the time to change that.

We have some in our neighborhood who have decided to go and others like us who decided to stay. I gave up trying to pick a side along time ago, figure each person must do what is best for them.

You will want to talk with someone about the tax, think in some cases where it was the primary residence you don't have to. There may even be instances of insolvency there which might get you somewhere. I am not an expert in any of these cases, so I would always recommend talking with someone who is before you make a decision.