Fannie Mae bans eviction of renters

The policy will allow renters living in foreclosed properties to sign leases with Fannie while the property is up for sale.

Sibling mortgage financier Freddie Mac, based in McLean, Va., is working on a similar policy, spokesman Brad German said.

But Amy Marx, an attorney with New Haven Legal Assistance in Connecticut, said Freddie Mac has not been responsive to requests it do the same, and has continued with evictions of renters in recent weeks.

"We are thrilled that Fannie Mae has done the right thing," she said. "Our hope that Freddie Mac will follow their lead."

Many households in Connecticut, she said, haven't been notified of Fannie Mae's policy change. Another concern, she said, is real estate agents charged with selling the properties won't notify tenants they can stay.

Fannie Mae and Freddie Mac said last week they will extend a suspension of foreclosure sales and evictions from single-family homes through the end of January.

The government-controlled home loan giants said the extension will allow borrowers facing foreclosure to keep their homes as they work to modify more loans.