We have suggested many ways to avoid foreclosure from: getting a second or third job, renting out a room, or just renting out your home and letting someone else pay the mortgage. CNNMoney.com reported today that Fannie Mae was giving troubled borrowers another way to avoid foreclosure. On Thursday Fannie Mae said it will allow eligible homeowners to rent their own homes.
"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 Jay Ryan, vice president of Fannie Mae, a mortgage-guarantee firm under federal government control.
Homeowners must show they can afford market rent, but that payment cannot be more than 31% of the borrower's pre-tax income. Leases may be up to 12 months, with the possibility of renewal or month-to-month extensions. If property is sold, the new owner picks up the lease.
Tenants of homeowners may also be eligible for leases.
I think this is a fantastic idea. Now is not the time to let your credit get tarnished. Especially, having a foreclosure hit your credit score. I know it seems like everybody is short selling and walking away from their homes, but do the right thing consumers-stay in your home and find a way to pay the mortgage. If you can't afford the mortgage maybe you can afford the rent. You need to live somewhere, it might as well be your own home.
Do you think this a good idea? Will this help stop foreclosures or are we doomed to be in this real estate fiasco forever?
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