Mortgage Giants Fannie Mae & Freddie Mac Announced Foreclosure Moratorium to Ease the Burdens of Financially Troubled Homeowners during the Holiday Season.
Federal National Mortgage Association (OTC:FNMA) and Federal Home Loan Mortgage Corp (OTC:FMCC) will postpone implementing evictions to borrowers who have problems in making their house payments and are facing foreclosures, in order to ensure that they will have a home to stay in during the holiday season.
According to Federal National Mortgage Association (OTC:FNMA) and Federal Home Loan Mortgage Corp(OTC:FMCC), the postponement of evictions covers single-family homes and 2-4 unit properties, starting December 19 until January of next year.
The mortgage giants also previously announced the temporary suspension of foreclosure sales and evictions for 90 days, until February 1, 2013 in areas designated by FEMA assistance due to damages caused by Hurricane Sandy.
Terry Edwards, executive vice president of credit portfolio management of Federal National Mortgage Association (OTC:FNMA) said the company decided to implement the foreclosure moratorium in support of families who are facing financial challenges and foreclosures. Edwards said, “The holidays are a chance to be with loved ones and we want to relieve some stress at this time of year. We encourage homeowners having difficulty to reach out for help as soon as possible.”
On the other hand, Tracy Mooney, senior vice-president of servicing and REO of Federal Home Loan Mortgage Corp (OTC:FMCC) said, “We are instructing our foreclosure attorneys to suspend pending eviction lockouts on foreclosed homes in order to provide a greater measure of certainty to families during the holiday season.”
A report from Reuters noted that the number of foreclosed homes is still a problem in the United States housing market as it recovers slowly. The prices of foreclosed homes are pulling the property values. Over the past four years, more than 3.5 million homes were foreclosed and approximately 10.8 million homeowners owe more than the value of their properties.
Fannie Mae and Freddie Mac are encouraging homeowners at risk of losing their homes to explore foreclosure alternatives on how they would be able to keep their homes by finding more details via mortgage help centers, hotlines, and websites.
Over the past several years, the mortgage giants implemented similar postponement on foreclosures during the holidays to ease the burdens of financially troubled homeowners.
In September 2008, the Bush Administration placed the mortgage giants under conservatorship, and the federal government infused $188 billion to keep its business operations afloat.