Fannie Mae to End Tenant Evictions in Foreclosures

Fannie Mae is finalizing a national policy that will allow tenants to remain in their homes Wall Street Journal reported on Monday, December 15, 2008, even if their landlord goes into foreclosure -- a landmark decision for tenants.

The policy will be in effect Jan. 9,2009, Fannie Mae said, and reflects growing pressure on the mortgage company from a legal-aid group that threatened to sue over recent evictions. The company said it will also ensure its current holiday moratorium on new evictions is being followed until the new policy takes effect.

In late November Fannie Mae and Freddie Mac said they would suspend tenant evictions temporarily during the year-end holidays. New Haven Legal Assistance said that despite the pledge, Fannie Mae was proceeding with more than a dozen new eviction cases in Connecticut. The advocacy group said the evictions would violate legislation passed earlier this year to rescue the two mortgage-finance giants that required them "to permit bona fide tenants who are current on their rent to remain in their homes under the terms of their lease."