The two mortgage GSEs, Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) have announced that it will suspend sales of foreclosure properties and eviction from foreclosed homes from November 26, 2008 to January 9, 2009. This move will keep troubled homeowners stay in their homes for the holidays without the fear of being kicked out or evicted from their homes.
These companies that are controlled by the Federal Housing Finance Administration (FHFA) have ordered mortgage servicers and attorneys handling foreclosures to prohibit eviction and sales of single-family or multiple-unit properties with mortgages that are owned by these GSEs. These companies have been making headway in preventing foreclosures for at least three out of five beleaguered homeowners and would like to provide families in trouble of losing their homes some assurance at least during the holidays.
Servicers of mortgages owned by these two entities are working with troubled homeowners to find options for them to stay in their homes. Activities include a review of their mortgages and financial capabilities, and possibilities on restructuring the mortgage to make payments current.
With 140,000 mortgages still delinquent, the brief suspension will provide ample time for these servicers to finalize details of the Streamlined Modification mortgage program with borrowers and ultimately avoid foreclosures. The program is set to take flight on December 15, and is targeting delinquent homeowners who were not able to pay their last 3 monthly amortizations.
Unemployment rates have been on the upswing, and this month first-time filings for unemployment benefits have reached 27,000 cases and have flooded welfare offices. This has been the highest level since July of 1992. Economic indexes also fell by 0.8 percent in October. This is a strong indicator that the economy is getting weaker and would have a profound impact on foreclosures. Unless these two mortgage giants step up on their campaign, together with other sectors also bent in dealing with foreclosures, homeowners will be facing tougher times in the year ahead.
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