The government-controlled company, through its new "Deed for Lease" program, will allow borrowers to transfer ownership to Fannie Mae and sign a one-year lease, with month-to-month extensions after that.

Denninger argues this is not as "generous" as it sounds, as its just a scheme to avoid selling the properties and taking the balance sheet loss. However, it is unclear from this how Fannie will internally account for the rental conversion.

It is rather telling that Fannie plans to hire an outside firm to manage the rentals. If that is the case, why not just sell them to an outside firm to, and put cash back in the government's pockets, hmmmmmmm???

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