Mortgage entities Citigroup, Fannie Mae and Freddie Mac have suspended single-family, multifamily and mobile foreclosure auctions in Alabama and three other Gulf Coast states – Mississippi, Louisiana and Florida – for three months until September 17 to help homeowners affected by the Gulf Coast oil spill.
CitiMortgage announced that owners of Citi-mortgaged homes within 25 miles of Gulf Coast areas affected by the spill will be helped under the new mortgage relief program.
Similarly, Fannie and Freddie said they will help contain home auctions in Alabama arising from the oil spill by not only offering three months of mortgage relief, but also by providing opportunities for program extension to qualified homeowners.
Meanwhile, in a related development, the Alabama Mortgage Brokers Association is making efforts to help every list of foreclosure auctions in the state by campaigning against laws and regulations that impede the sales of foreclosed properties. The association recently asked state legislators to remove the right of redemption law for foreclosure properties or cut it down from one year to a shorter frame.
The broker group cited that only Alabama and Kansas grant one year for former owners to redeem their foreclosed properties. The other 9 states that have similar laws provide only 6 months or less. The brokers argued that the law makes it difficult for the market to absorb properties that have gone through mobile foreclosure auctions and other types of public auctions.
Additionally, the association has called on realtors, mortgage originators and its members to write letters to ask Fannie Mae to change its policy of barring home loans on foreclosed properties that are still under a mortgage redemption period. Fannie considers the redemption period as a title defect, so prospective buyers of affected homes cannot obtain Fannie loans.
Based on statements from local agents, an estimated 60 percent of total home sales in Alabama and other Gulf Coast states are foreclosure sales or short sales, and about 200 units from mobile foreclosure auctions and other residential auctions are offered for resale every week.
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