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Home General News Mortgage Industry Articles Freddie Mac to Offer Leases to Those Facing Foreclosure
Freddie Mac to Offer Leases to Those Facing Foreclosure PDF Print E-mail
Written by By: Reuters   

Freddie Mac, the second-largest provider of funding for U.S. home mortgages, on Friday said it would offer leases to borrowers who lose their homes under foreclosure.

Tenants of borrowers will also be offered leases, a feature of a new plan implemented this month by Fannie Mae, according to statements from the two government-controlled companies.

Both extended their suspensions of evictions of borrowers or renters due to foreclosure through Feb. 28.

By extending leases to borrowers in addition to tenants, Freddie Mac's plan may go further toward easing the impact of foreclosures on homeowners and communities, where a rising numbers of empty homes is depressing home values. When home prices fall, foreclosures follow as stressed borrowers find themselves owing more than the house is worth and unable to obtain financing.

Credit Suisse in December estimated that 8.1 million, or 16 percent of all mortgages, would be in foreclosure over the next four years without more lender or government interventions.

"Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market," David Moffett, Freddie Mac's chief executive officer, said in a statement.

Freddie Mac will still seek loan modifications to allow borrowers to retain ownership, it said. Eligible renters will be offered month-to-month leases, the companies said.