Freddie Mac Announces New Policy Allowing People to Stay in their Foreclosed Homes
The government-backed mortgage company Freddie Mac announced its new policy that will allow home owners to stay as renters in their houses despite foreclosure order. With this plan, it has been estimated that over 8,500 families facing foreclosure can stay in their homes.
In 2008, the housing meltdown hit the US, affecting most homeowners in California, Arizona, and Florida.
The government-funded mortgage company Freddie Mac announced on Friday its new policy that will allow borrowers to stay in their homes despite foreclosure order.
In an interview, Freddie Mac Chief Executive David M. Moffett said the policy will promote the fast recovery of the housing market as properties which are occupied will not depreciate since borrowers will repair and maintain it.
With this policy, home owners are required to pay monthly rentals which are lower than their mortgage payments.
While this plan will help people facing eviction from their houses, this will only save a small portion of home owners as only 8,500 properties in foreclosure is managed by Freddie Mac. According to a recent data, other mortgage firms, both private and government-funded, have more than 2 million home owners facing foreclosure.
Despite some predicaments, experts believe that Freddie Mac’s new policy might serve as a foundation for solving the housing meltdown which is expected to be adopted by other mortgage companies.
According to experts, the increasing number of foreclosure homes depreciates the overall value of a certain neighbourhoods.
In 2008, the Wall Street meltdown further aggravated the already shaky housing industry especially in Arizona, California, and Florida where majority of the foreclosure homes were located.
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