For Immediate Release
Alan Barber, (202) 293-5380 x115
Fannie Mae and Freddie Mac Announce Programs to Help Homeowners
Plans would allow those facing foreclosure to remain in properties as renters
WASHINGTON - The Center for Economic and Policy Research
(CEPR) applauds the decisions by Fannie Mae and Freddie Mac to help
some foreclosed homeowners by allowing them to stay in their homes as
renters on month to month leases.
"This move will provide relief to tens of thousands of families at very
little cost to taxpayers," said CEPR Co-Director Dean Baker. "This is a
crucial first step in addressing the economic woes caused by the
collapse of the U.S. housing market and other lenders would do well to
follow Fannie and Freddie's lead."
Allowing homeowners and renters to remain in their properties while
paying rent is a very sensible solution to the rash of foreclosures
plaguing the nation. The Fannie and Freddie programs will help give
families some security in their housing, will cost taxpayers little,
and will help to slow the fall of local property values due to
foreclosed and vacated properties.
A similar plan
from Baker would go further and give the right to remain in a home as a
renter for five to ten years, rather than the month-to-month lease of
the Freddie and Fannie programs. This would provide real security of
tenure. Also, if passed into law, it would provide lenders with a real
incentive to negotiate terms that allow homeowners to stay in their
homes as owners. Aspects of this plan have been incorporated into
recent legislation proposed by Congressman Raul Grijalva (AZ).
The Fannie and Freddie programs will provide much needed relief to tens
of thousands of homeowners. The adoption of a similar program by
Congress would go much further to help homeowners facing foreclosure.
The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.