Fannie Mae Foreclosure Process for Renter

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    Foreclosure and Renters

    • A person renting a house, or a room in a house, is responsible for paying rent, but it is the homeowner -- not the renter -- who is responsible for making monthly mortgage payments. Often, the homeowner may default on the mortgage without the renters having any knowledge of a pending foreclosure. In such a situation, renters may find themselves unexpectedly evicted even though they have regularly kept up with their rent payments.

    Tenant-in-Place Rental Policy

    • Fannie Mae offers renters an option to stay in a foreclosed home at rents comparable to the prevailing market. Only homes owned by Fannie Mae are eligible for the Tenant-in-Place rental policy. The policy is intended to help stabilize communities affected by high foreclosure rates and to provide a fair resolution for renters affected by a property foreclosure.

    Tenant-in-Place Program Criteria

    • The policy covers single-family homes, as well as small -- 2-to-4 units -- apartments. Renters must actually be living in the property at the time of foreclosure; the property itself must be in livable condition. Fannie Mae generally continues to list the home for sale during the rental period; if the home sells, the renters have an option to continue their lease with the new owner.

    Protecting Tenants at Foreclosure Act

    • Fannie Mae is also subject to the requirements of the Protecting Tenants at Foreclosure Act of 2009, which establishes notification and sale procedures for properties covered by a federally related mortgage where a renter is present. Fannie Mae's Tenant-in-Place program generally goes beyond the PTFA requirements, however.

    Deed-for-Lease Program

    • Fannie Mae also works with homeowners facing foreclosure by offering an option to lease the home back from Fannie Mae, allowing the owner to stay in the house as a renter. The Deed-for-Lease program can also include existing tenants.

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