Tuesday, April 27, 2010

Fannie Mae Takes Steps to Protect Tenants in its Foreclosed Properties

Following a complaint from Tenants Together, California’s statewide organization for renters’ rights, Fannie Mae has distributed a zero-tolerance policy advisory notice to its agents and removed from its broker network at least one of the real estate agents about whom Tenants Together had complained.

In a written advisory notice to its agents dealing with tenants after foreclosure, Fannie Mae makes clear that it expects them “to follow both the letter and the spirit of the law and to ensure that tenants are 100% clear on every option available to them” and that “not complying with Fannie Mae policy and procedure on this issue will result in termination.”

Tenants are routinely harassed, misinformed, and illegally evicted by realtors and law firms working for banks after foreclosure. This widespread problem has caught the attention of advocates, regulators, and enforcement agencies. Most recently, the Connecticut Attorney General’s Office issued a cease and desist letter to bank servicers, real estate agents, and lawyers abusing tenants in foreclosed homes.

In addition to sending the advisory to its agents, Fannie Mae has intervened on the individual cases cited by Tenants Together. As a result, Tenants Together members who were facing illegal evictions have now signed new leases and are staying in their homes.

Because real estate agents are in the business vacating properties to prepare them for sale, many often see tenants as a road block to their commission. While we applaud Fannie Mae for taking steps in the right direction, we urge it to start using property managers instead of real estate agents to discuss its newly expanded rental options with tenants.

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