Industry NewsMortgage

Give up home, Fannie will lease it back

'Deed for Lease' program avoids foreclosure

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Fannie Mae is offering to let troubled borrowers who don't qualify for a loan modification stay in their homes as renters if they volunteer to relinquish ownership through a deed in lieu of foreclosure.Fannie Mae's Deed for Lease program is also available to qualified borrowers who had previously been granted a loan modification but were unable to keep up their payments. The homes will be leased at market rates, and borrowers or tenants will qualify to stay only if they can document that rent does not exceed 31 percent of their gross income."This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities," said Fannie Mae Vice President Jay Ryan in a press release.Like short sales, deeds in lieu of foreclosure allow troubled borrowers to avoid the foreclosure process, which can be expensive for lenders and damage homeowners' credit ratings for ...