New Deed for Lease program will not benefit homeowners with second mortgages
Fannie Mae, the nation’s largest mortgage-holder, announced the “Deed for Lease” program Thursday for borrowers who do not qualify for a loan modification.
Essentially, the home-owners would become renters, transferring their property to the lender by completing a deed in lieu of foreclosure, and then leasing back the house at a market rate.
The lease can be up to 12 months, with the possibility of renewal or month-to-month extensions. If the home is sold, the buyer picks up the lease.
Jay Ryan, vice president of Fannie Mae, said the new program would help eliminate some of the uncertainty of foreclosure and keep families in their homes at least temporarily.
It also would eliminate the cost of moving and renting storage spaces, additional expenses for those evicted after foreclosure and prevent more homes from going vacant and unkempt.
However, homeowners with second mortgages are not eligible for this new program. This is not good news for those stuck with piggy-back loans that were popular during the height of the real estate bubble.
Many borrowers in expensive real estate markets took out jumbo home loans that were a combination of an 80% first mortgage and 20% second mortgage.
FYI: Read this article for information on a strategy that may work for you to get rid of your second lien
Before letting a bank force you out of your home, you may want to obtain some coaching on how to stop the foreclosure process dead in its tracts and buy some time to make your next move
If you’re interested, you can check out the website for more information here
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