Fannie Mae and Freddie Mac will extend their suspension of all foreclosure sales and evictions for occupied single-family homes that the two companies own mortgages for through January 31, 2009.
The two had suspended the proceedings in anticipation of the holiday season beginning on Nov. 26, but were expected to resume on Jan. 9. Now they say they will give lenders servicing their mortgages more time to prevent foreclosures with the streamlined modification program they developed with the Federal Housing Finance Agency (FHFA), the HOPE NOW Alliance, and 27 mortgage servicers.
The suspensions do not apply to vacant single family properties.
“Freddie Mac is committed to pursuing every responsible opportunity to reduce foreclosures and accelerate the return of stability to the U.S. housing market,” Freddie Mac CEO David Moffett said. “Today’s announcement will provide Freddie Mac and its servicers additional opportunities to help put more families on the path to stable homeownership.”
The streamlined modification program went into operation on Dec. 15. It's aimed at borrowers that have missed at least three payments, own and occupy the property associated with the mortgage as a primary residence, and hasn't filed for bankruptcy. The program allows debtors and servicers the ability to modify loans so the homeowner can afford their monthly payment by reducing the interest rate and with mortgage term extensions.
The suspension will also give servicers more time to utilize Fannie Mae's National REO Rental Policy, which will allow renters in company-owned foreclosed properties to stay in their homes. Details of that new policy will be announced shortly.
In addition, borrowers in danger of missing a payment have options like forbearance, rate reductions, and mortgage term extensions. Freddie Mac said it helped 60 percent of its delinquent borrowers avoid foreclosure in 2008.
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