Fannie Mae is introducing the Deed-for-Lease Program (D4L), a program designed to minimize family displacement, deterioration of neighborhoods caused by vandalism and theft to vacant homes, and the effect these have on families, communities and home price stabilization.

Here are some of the details regarding the Deed for Lease Program:

• Must be a Fannie Mae loan.
• Cannot be eligible for a loan modification.
• Rent cannot exceed 31% of the household income.
• Provides up to a one year lease- which could possibly become a month to month lease.
• Properties that are eligible for a DIL can possibly qualify for this program. Contingent upon successful DIL.
• Both Primary Residences and Investment properties will qualify for the program.
• Subleasing is prohibited under program.

Other Requirements for Deed for Lease

• The mortgage loan is a first lien mortgage loan secured by a one- to four-unit property. All property types are eligible. Second lien mortgage loans are not eligible.
• The mortgage loan is not guaranteed or insured by a federal agency (FHA, HUD, VA, or Rural Development).
• The borrower resides in the property as a primary residence or has leased the property to a tenant who uses the property as a primary residence. Second homes or vacation homes are not eligible.
• At least three payments have been made since origination or since the last modification.
• At the time of the referral to Fannie Mae for the D4L, the borrower is not 12 or more payments past due on the mortgage loan.
• The borrower is not involved in an active bankruptcy proceeding and is not a party to litigation involving the subject property or the mortgage loan.
• Marketable title is able to be conveyed (a title insurance policy is required).
• If there are subordinate liens secured against the subject, lien releases can be obtained.
• The occupant of the property (i.e., the borrower or the borrower’s tenant) has verifiable income. Occupants with no source of income are not eligible.
• There are no zoning or homeowner’s association (HOA) rental limitations that would prohibit a D4L.

Today, as many of my friends celebrate Good Friday and I continue to celebrate Passover, my office is a virtual ghost town. So I actually had a moment to take stock on changes that are occurring in our collective lives. First and foremost it is just hard to believe that the White House held a Passover Seder last night. http://thecaucus.blogs.nytimes.com/2009/04/09/obama-to-host-seder-dinner/ The Seder is the ceremonial meal whereby Jews retell  their miraculous story of their departure from Egypt while having a rather long ceremonial meal conducted in a certain order.  In some ways the Passover story can serve as an allegory for the Obama Administration in that just over a year ago it would have seemed that only by a “miracle” would we be sitting here right now with our first African American President.

President Obama Hosts First Ever Passover Seder at the White House

Further, as someone deeply entrenched in the real estate economy, as a foreclosure defense lawyer and owner of Weston Title, I would never have envisioned a sitting President calling on homeowners to refinance their homes.   And yesterday that is exactly what the President did! http://online.wsj.com/article/SB123932215927307049.html The President explained the low interest rate climate created by the Bailout and how families can actually create their own stimulus of the economy by pumping back the money they save through refinancing– directly into the economy.

But even before the President gave his three cheers to mortgage refinancing, we have been seeing an up tick in activity in the real estate market in general and in terms of banks contacting us to help them close their refinances. In fact, earlier in the week, I thought for a moment it was Christmas when all the phone lights on my office phone were lit up like a Christmas Tree. I had to use my cell phone to call out of the office.

The buyers who are closing are bottom fishers looking for great deals from short sales, foreclosures, builder specs and generally first time home buyers who have now concluded that buying is cheaper than renting.  Some high end buyers are anticipating a wave of inflation that may be here sooner than any one can imagine.

So with all the change that is going on… one thing that has not changed– and will not change is how capitalistic market forces that are merely reflections of our collective greed and fear are  working well once again.

Have a great weekend!

President Obama’s plan is real and politically, a good start, but the announcements today will most likely not fully abate the real problem .

Here’s why:

The residential real estate market lost $8,000,000,000,000. Yes. $8 trillion in equity! Caused by lots of irresponsible borrowing, lending and speculating.  There is enough blame to go around here. So lets stop playing the blame game.

The government’s plan is, of course, trying to reward the homeowners that have continued to make their monthly payments even if they are under water. That is a great thing, even admirable.  It addresses the whole moral hazard issue of not rewarding the rascals – like the government initially did with Wall Street.  But $75 billion is less than 10 percent of the amount of the problem. I am not saying that the Obama Administration should do anything different, just that it’s amazing that this wound has taken until NOW to be tended to! Now, that does not mean that the patient is getting better .  Just maybe… NOT ANY worse.

I still say it will be the first time homebuyers, the bottom fishers, and the people who keep paying their loans that will truly bail out the economy. So thank you President Obama on behalf of my friends in the title business and the refinance industry for putting life back into our livelihoods.

What this all means for the guy who lost his job and really can’t afford his old lifestyle I am not sure. Actually I am sure; it means too little too late.

We will be addressing the foreclosure rescue plan and how it can help YOU at our monthly foreclosure workshops. The first one is March 5th 2009. For more information read our foreclosure workshop press release.