Carrie Bay | 11.20.08
Both companies have ordered their national networks of mortgage servicers and foreclosure attorneys to halt all foreclosure sales and evictions involving occupied single-family properties. Freddie Mac is also including 2-4 unit occupancies as part of the suspension. The foreclosure moratoriums will take effect November 26 and go through January 9, 2009.
The suspensions will give servicers time to implement the Streamlined Modification Program announced by Fannie Mae, Freddie Mac, and their conservator, the Federal Housing Finance Agency (FHFA). The agencies’ fast-track plan for getting seriously delinquent borrowers into more affordable mortgages was announced on November 11 in conjunction with the HOPE NOW Alliance and is scheduled to launch on December 15.
The temporary suspensions are also expected to give servicers more time to help troubled borrowers avoid foreclosure. Fannie Mae’s attorneys and servicers plan to reach out to more than 10,000 borrowers the company estimates will be affected during the suspension period. Freddie Mac said its representatives will contact an estimated 6,000 borrowers.
“By working closely with FHFA and our servicers, Freddie Mac is on track to help three out of every five troubled borrowers with Freddie Mac-owned loans avoid foreclosure this year,” said Freddie Mac CEO David M. Moffett. “Today’s announcement builds on this momentum and provides a new measure of certainty to many of these families during the holidays.”
The chiefs of both organizations emphasized that lenders servicing mortgages they own will continue to work with distressed borrowers to consider all workout options available, such as permanent rate reductions and mortgage term extension modifications, “even if previous workout efforts have been unsuccessful,” Fannie Mae said in a written statement. This year, Freddie Mac said it expects to approve 84,000 workouts for the estimated 140,000 who are delinquent on its wholly-owned mortgages. Sister financier, Fannie Mae, did not release its workout estimates.
“Fannie Mae is committed to working with FHFA to implement the streamlined modification program as quickly as possible to help prevent unnecessary foreclosures,” said Herb Allison, Fannie Mae’s CEO. “We must and will do more.”
Thanks to Gwen and Rhoda from Holmgren and Associates for this information:
REAL ESTATE FINANCE
Gwen Hoople and Rhoda Paul
Mortgage Lending Specialists
HOLMGREN + ASSOCIATES
1900 Mountain Boulevard
Oakland, CA 94611