Saving Michigan Foreclosures with New Fannie Mae Program

Posted in Michigan Foreclosures by Michigan Real Estate Expert on December 21st, 2009

As the number of foreclosures rise around the nation, some lenders have held their Michigan foreclosures in private stock, hoping to sell them gradually in a stabilizing real estate market. That hope has slowly dwindled, however, even with the five-month extension on home buying tax credits  signed by the President November 6th of this year.

Government-owned Fannie Mae may have come up with a solution.

Some homeowners facing a Michigan foreclosure have more options than foreclosure, loan modification or a short sale. Some qualify for a deed-in-lieu (DIL), where they sign away all their equity back to the lender and walk away “debt free” (except, possibly, for taxes). Unfortunately, a DIL leaves the homeowner without a home to live in, and the lender with a house to sell in an uncertain market.

Deed for Lease Program
Under Fannie Mae’s new Deed for Lease Program (D4L), those who go through the DIL process may be eligible to rent their home back from Fannie Mae at current market rental rates. This may not sound like a great deal, but many families have ended up on the street because of foreclosure. Those who qualify for the D4L Program will be able to remain in their homes for at least 12 months. To learn more, read the entire D4L Program eligibility list.  Here are a few of the qualifications:

  • No prohibitive Homeowner’s Association rental limitations
  • The cost of any required repairs is an acceptable amount, based on the value of the property
  • The income the lender receives from the current rental market should be expected to cover any maintenance/management costs
  • The current rental rates must be less than 31% of your gross income
  • The home must be a primary residence

Whether the D4L Program will help or hinder the number of Michigan foreclosures is still up in the air, but it does give homeowners other options – something they’ve been sorely lacking.
If you’re facing foreclosure and qualify for short sale, I’d love to help. Call me at 248-514-2640 or email me at for more information.

Lee Morof sells North Woodward Homes in Oakland County Michigan

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
Call:  248-514-2640

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