New Program: Deed for Lease

November 5, 2009 by · Leave a Comment
Filed under: Real Estate News 

First off, Representative Marcy Kaptur of Ohio mentioned this approach on Deed for Lease Program on Bill Moyer’s Journal when she interviewed with Simon Johnson of MIT.  This is an interesting program in the fact it would allow these owner occupied homes to continue to be filled and not have them foreclosed on and hit the market and put more downward pressure on U.S. housing prices.

My problem is that the rent is now going to the lenders.  If these were the banks that made these reckless loans in the first place then it now rewards these banks with the property and rent.  Personally I would not turn in my deed and would make them foreclose and make the lender produce a mortgage in court to prove they actually own the note/debt.  With this major securitization push during the housing bubble, many of these notes have been packaged and sliced up to many investors so it is hard to prove ownership and a few judges have used to this so they did not uphold a foreclosure.

I was and still am against the bailout from day one but at this point if we are going to bailout large banks and other financial institutions then there should be some relief for homeowners if this is their primary residence.  I know many not agree with this but if you are for saving banks but not this then I just flat out don’t value your stance on this.  If you are against all the bailouts then I agree but at this point we are past that point so we are now dealing with this reality and this is my opinion.

The Deed for Lease Program is designed to help borrowers who aren’t eligible or haven’t been able to sustain other work-out solutions, including a modification, according to a news release.

Participating borrowers voluntarily transfer their property deed back to the lender; the lender then leases the house back to the borrower at a market rate for up to a year. After the period is up, there’s a possibility of a term renewal or a month-to-month lease arrangement, the release said.

“The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications,” said Jay Ryan, vice president of Fannie Mae, in the release. “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.”

Source: Market Watch

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