The accidental landlords
Fannie Mae, that little spendthrift tartlet and loose date for the Democrats, has found a new way to squander money and wreck America's financial institutions. Fannie's
Essentially, homeowners in foreclosure would be allowed to switch from ownership to renting their property.
I work for one of the largest "scattered site" property management companies in St. Louis, and I have years of experience with rental property. While the Deed for Lease program may sound like a reasonable idea, it is anything but -- when I told my broker about this harebrained scheme, his jaw hit the floor.
For starters, people qualified for the program will be those who cannot pay their mortgages. There is a reason why they cannot get their loans modified: there is simply no way to adjust them so the homeowner can afford to pay them. I frequently explain to tenants that rental houses generally cost more than a home mortgage because the landlord has to pay a mortgage himself, plus pay for maintenance and utilities, obligatory or otherwise. (Sewer service often cannot be taken out of the owner's name, since a sewer cannot be disconnected for non-payment.) Fannie Mae's premise here is that rent will be cheaper than the mortgage, but that is not necessarily so. In point of fact, for the homeowner to convert to a tenant the rent will have to be lowered, likely by a large amount. Already the bank is losing money on its "investment," -- an investment they did
