Monday, October 31, 2011

State Housing Agency Temporarily Suspends Foreclosures On Brrowers Who Rent Out There Homes

The following is a reprint from the Sacramento Bee, published October 28, 2011.

The California Housing Finance Agency has softened its hard stance on borrowers who rent out their properties, saying it will temporarily suspend any foreclosure actions it has initiated against such homeowners.
The move comes after a report released Monday by the state Senate Office of Oversight and Outcomes found that CalHFA, which makes low-interest loans to first-time buyers, has filed foreclosure notices on 21 homeowners who were still current on their state loans.

The report, dubbed "Good Deeds Punished," said that many of those borrowers had moved out into larger residences but were forced to rent out their first-homes because they were unable to sell them in the down real estate market.

The agency's reversal was announced Friday by Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Senate Transportation and Housing Committee Chair Mark DeSaulnier, D-Concord, who had asked CalHFA to reconsider.

"The agency is making the right decision during difficult economic times," said Steinberg. "Struggling families who are working to do the right thing in meeting their obligations shouldn't be saddled with an extra, unnecessary burden."

CalHFA had previously said it believes that federal law bars renting in such cases.

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