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Government

Right to Rent Helping Families Move Back into Homeownership

The LA Times ran a nice story on Friday about the Coronel family of Azusa, California, and how they were able to buy back their foreclosed home "for $280,000, far less than the $400,000-plus debt that had gone into default." They had been able to stay in their home after their foreclosure because "Fannie Mae gave permission in 2010 for the Coronels to stay on in the Azusa house as renters."

The article asked if Fannie Mae's allowing this "indirect" principal reduction reflects a change in policy.  That's because before the Coronel's case, Fannie Mae and Freddie Mac required foreclosed homeowners to pay their entire outstanding mortgage balance before being able to repurchase their homes.  That's while other buyers were able to pay the lower market price for the same property.

CEPR and / November 26, 2014