New Program Designed to Help Avoid Foreclosure

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By Amanda Hara

NASHVILLE, Tenn. - David Huey, with the Financial Counselors of America, has been helping families in financial crisis for the past eight months.

For the many people coming through his door, there are dozens of options other than foreclosure available. Huey said he will not be suggesting Fannie Mae's new approach called Deed for Lease.

It works like this: you hand over your deed, and Fannie Mae lets you rent your home at the market rate while it looks for potential buyers. You keep a roof over your head, while Fannie Mae makes money on a house that would otherwise sit empty.

"First of all, we need to consider all other options that are feasible before you go with something that's just going to put a roof over your head for a few months, and isn't really going to solve your problem long term," said Huey.

Realtors like John Rummage of American Realty Resources said for the most part the pro's of Deed for Lease only benefit the banks.

“I think that Fannie Mae was trying to look like a good citizen,” said Rummage.

Rummage said that if people do not have a job to pay their mortgage in the first place, then they likely will not have jobs to pay their rent.

The program designed to keep people in their homes and boost the housing market may not be anymore than a quick fix.

“[It’s] a band aid over a catastrophic wound. Someone's falling out of an airplane at 10,000 feet and they rush over with a band aid, it's maybe too little too late,” said Rummage.

As for Huey, he said he does not see things changing anytime soon despite the Deed for Lease program. Thursday will likely bring more families facing financial crisis.

email: ahara@newschannel5.com