In National Policy Change, Three Renters and Greater New Haven Legal Services Lawyer “Convinced Fannie Mae to Stop Pushing Good Tenants Out Onto the Street”
Legal Services E-lert
Bibliographic Info:
Author: Mary E. O’Leary
Source: The New Haven Register (CT)
Date: December 12, 2008
The New Haven Register reports: "The efforts of three renters and one New Haven lawyer have convinced Fannie Mae to stop pushing good tenants out onto the street. Amy Marx, of the New Haven Legal Assistance Association, said Monday that Fannie Mae, under the threat of legal action, has agreed to provide leases for renters with good payment records so they can remain in their homes as their landlords go through foreclosure. The national policy change affects dozens of tenants in the state and about 5,000 nationwide. Fannie Mae and Freddie Mac are mortgage companies now operating under government control . . . . Marx said it started with a . . . case in Hartford, and after talking with her colleagues across the state, she found [two more plaintiffs] in Greater New Haven. ‘We took the relay baton and ran with it,' Marx said of the legal service agency's efforts to address the issue nationally. The irony of the Marx case is that the legal services organizations in Connecticut are facing drastic budget cuts and will be hard-pressed to continue this work, she said . . . . Marx has also convinced Curtis Lu, principal deputy general counsel in the legal department at Fannie Mae, to stop processing all aspects of evictions until Jan. 9 [2009] . . . . But the initial process continues to roll out, particularly the ‘cash for keys' proposal, which some tenants would take without knowing their rights to appeal in housing court. ‘It was a terrible policy. It wreaks havoc,' Marx said. Fannie Mae would rather deal with an empty house in a foreclosure situation, but Marx said why not have good, rent-paying tenants remain as a more stabilizing influence in a neighborhood? The bigger issue would be to apply the policy to the banks, which hold the majority of mortgages for houses that are being foreclosed on, Marx said, and they will push for legislation in Washington, D.C., and in the state. An estimated 70,000 renters nationwide may be evicted, even though they have good rent payment records."