Foreclosure Offense: Legal Aid Effort In Connecticut Has Nationwide Effect As Fannie Persuaded To Reverse Course On Foreclosure Evictions; Freddie Expects To Follow Suit

In Hartford, Connecticut, The Hartford Courant reports:

What began with a single mother in Hartford fighting her eviction has led to a policy change by Fannie Mae allowing renters to remain in their homes after their landlords are foreclosed on, a switch that could help thousands of renters across the country.

Legal Aid lawyers in Hartford — and subsequently, New Haven — began fighting tenant evictions by Fannie Mae in Housing Court after Congress passed a financial market bailout bill containing provisions protecting tenants in good standing from eviction.

The Emergency Economic Stabilization Act of 2008 (http://financialservices.house.gov/essa/essabill.pdf) applies to federal agencies that control mortgages. Legal Aid lawyers argued that provisions in the law(1) pertained to both Fannie Mae and Freddie Mac because they were taken over by the federal government. The policy change — Freddie Mac said Monday it expects to follow suit — will have vast implications for renters because Fannie Mae and Freddie Mac guarantee or own half of the country’s residential mortgages, which apply to buildings that house one to four families.

For the story, see http://www.courant.com/business/hc-fanniemae1216.artdec16,0,4614079.story (Renter Wins Fannie Mae Fight) (if link expires, check http://www.tradingmarkets.com/hpad/index.cfm?purl=/.site/news/Stock%20News/2086889/).

See also:

New Haven Independent: http://www.newhavenindependent.org/archives/2008/12/foreclosure_evi.php.

The Wall Street Journal: http://online.wsj.com/article/SB122929716434005201.html?mod=googlenews_wsj.

(1) See http://financialservices.house.gov/essa/essabill.pdf, which, they argue, requires Fannie Mae “to permit bona fide tenants who are current on their rent to remain in their homes under the terms of their lease.”

 

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