Freddie Mac Rolls out REO Rentals, Halts Evictions Again
Get ready for eviction volumes to start decreasing, at least in the short run. And perhaps it's time to start asking exactly when does a rental property ever become a owner-occupied resale? Freddie Mac (FRE) said Thursday morning that it had officially launched its new REO Rental Initiative, which will allow tenants and former owners the option to lease their recently foreclosed properties on a month-to-month basis. The new initiative will be managed by HomeSteps, Freddie Mac's national real estate unit, and implemented through several national property management firms; the GSE declined to identify which property management firms had obtained a contract to manage the program. The GSE also announced it will continue to suspend all eviction actions until April 1, 2009, "to ensure there is ample time for current occupants to learn about the options available to them under the new initiative." Freddie, along with sister GSE Fannie Mae, has halted all eviction activity since mid-December under various auspices. Freddie Mac's Ingrid Beckles, senior vice president of default asset management, said the program would give "renters and former owners more time to determine what options are best for them and their families," and argued that the program would stabilize property values as well. Starting today, Freddie said in a press statement that the property management firms it contracts with will begin the process of contacting occupants of foreclosed properties to determine their interest in staying in the home and their eligibility for a month-to-month lease. To qualify for a lease, the tenant or former owner must occupy the property and show they have adequate income to pay the monthly rental amount established by the property management company based on market rents for the area in which the home is located. Occupants must agree to allow HomeSteps to show the home to potential buyers as it will be marketed for sale during the lease period. Write to Paul Jackson at email@example.com.