Fannie Mae and Freddie Mac have given overextended borrowers a Thanksgiving present. The mortgage giants have temporarily suspended foreclosures through January of 2009. They have directed their loan servicing organizations and attorneys to suspend foreclosure sales and evictions on occupied single family homes. This has been implemented as support of the modification program which was announced on November 11 and is due to begin on December 15.
Inman News has published an article going into more detail on these new developments. According to the article “Fannie’s streamlined modification program is aimed at the highest risk borrower who has missed three payments or more, owns and occupies the primary residence, and has not filed for bankruptcy. The program creates a fast-track method for getting troubled borrowers into an affordable monthly payment through a mix of reducing the mortgage interest rate, extending the life of the loan or even deferring payments on part of the principal. Servicers have flexibility in the approach, but the objective is to create a more affordable payment for borrowers at risk of foreclosure.”
This new development should offer a chance for many borrowers to keep their homes and avoid foreclosure. According to Inman Freddie Mac expects to approve workouts on 84,000 or an estimated 140,000 who are delinquent on Freddie Mac owned mortgages.
To read the article click here.