D4L

The pragmatist in me likes this idea, though it seems like there are enough restrictions on eligibility to make the program unlikely to have much effect in the grand scheme of things.

Fannie Mae is offering a way around foreclosure that will actually let some families stay in their homes (as renters) for at least a year. It's called Deed for Lease (D4L 4 short), and is a combination of Deed in Lieu (DIL) plus a rental agreement. If you're unfamiliar with DIL the quick synopsis is the homeowner simply gives the house back to the bank and the loan is forgiven, skipping foreclosure and short sale. This is sometimes colloquially known as "just walking away", but what if you don't actually want to leave? D4L is the answer--mortgage goes away, but you stay in the house, presumably at rent you can afford.

Even if that rent is substantially below the old mortgage payment the bank may come out ahead of the alternatives. Since all of the loan mod programs are proving to be utter failures and the appeal of ruthless defaults is rising many people are simply staying in their homes paying nothing until they've exhausted all of their tactics for delaying foreclosure (see e.g. the Kempffs' story).

Deed-for-Lease Program (efanniemae.com)