Don’t fulfill your contractual obligations and you get bailed out.
Fulfill your contractual obligations and you get evicted.
That’s the way the process has played out.
Chauntay Barnes, 30, moved into a single-family home with her two kids in November 2007 on a quiet street in Hamden, Conn. She never missed a payment on her $800 rent — never had so much as a late fee — and yet in mid-September she opened her mail to find an eviction notice.
If you are going to solve the housing crisis, you can’t treat tenants who met the their obligations as a throwaway. Fannie Mae is going to work with some tenants to prevent eviction. Still, only a fraction of the evictions will be prevented.
In a move that provides relief to thousands of renters who face eviction but draws the federal government even deeper into the housing market, the loan giant Fannie Mae said Sunday that it would sign new leases with renters living in foreclosed properties owned by the company.
In recent months, skyrocketing foreclosure rates have exposed as many as 70,000 renters to evictions, even though many never missed rent payments, according to analysts who track housing data. In many cities and states, renters can be evicted after their home goes into foreclosure, regardless of how long their lease stretches into the future.
Yes, properties may be easier to market when vacant, but the reality is the property will likely see extended marketing times with the surplus inventory levels. Why not keep income coming in to the taxpayer while the market finds it groove?
“We’re not in the business of managing rental properties, and we’re not in the business of being a landlord,” said Thomas Kelly, a spokesman for JPMorgan Chase, which owns about two million loans. “Clearly the renter is caught in the middle in cases like this. When a property is in foreclosure, we follow the law.”
When will the renter stop being treated like a second class citizen? Is the American dream of homeownership myopic?
Aside: The National Community Reinvestment Coalition, a consumer advocacy group has an amazing public relations sensibility. I would guess that coverage of this issue in the NYT and WSJ was a perfectly placed pitch. Kudos to them on this important issue.
Tags: Fannie Mae, Bailout Nation
The market is totally skewed and now 60 minutes reports there are two more waves of defaults coming. There is hope for homsellers however to use “transferable seller financing”
In so many ways, renters are second class. Seems I can default on a home and still be living there 30, 60, 90 days later. Renters get 3 days in most cities to vacate if payment is missed.
Maybe the reason renters have to abide by their contracts is that they get no respect or bailouts.
Seems the disinfranchised are invisible in the free market system and it may be crucial they remain that way. Never seen nor heard, but the rent’s due Tuesday.
Is the way it is the way it should be?
This has become very common in Miami where tenants get the boot without knowing their landlords financial difficulties. There is supposed to be a State required notice prior to entering into a lease agreement very soon which may disclose any foreseeable foreclosure.