Fannie Mae offers option to foreclosure

WASHINGTON (AP) -- Homeowners on the verge of foreclosure could soon get a reprieve from government-controlled mortgage company Fannie Mae.

The new "Deed for Lease" program will allow homeowners to transfer title to Fannie Mae and sign a one-year lease, with potential month-to-month extensions after that. It also helps save money because the lender does not need to complete the often lengthy and time-consuming foreclosure process.

Critics question whether the change, announced yesterday, will only add to the mushrooming losses at Fannie Mae, which has received billions in taxpayer money. One analyst says the move would mean taxpayers will end up owning houses that Fannie Mae should have unloaded.

A statement from Fannie Mae Vice President Jay Ryan, however, says the program helps "eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities."