Struggling homeowners now have a weight temporarily lifted from their shoulders after Freddie Mac and Fannie Mae announced today that they are going to provide a break for those who have been unable to make mortgage payments and will suspend evictions of foreclosed homes until after the holiday season.
As NBC News explains, Fannie Mae and Freddie Mac provide a steady stream of funds, buy mortgages from lenders, and then either hold mortgages or repackage them as securities, which they sell to investors with a guarantee.
While Fannie Mae did report that legal and administrative proceedings for evictions could continue under instruction, families living in foreclosed homes will be guaranteed a suspended period according to Mortgage News Daily. Freddie Mac explained that their suspension will only apply to eviction lockouts on REO homes owned by the GSE and will not affect other pre/post-foreclosure processes.
In addition, Bank of America will also temporarily stop foreclosure evictions for its loans and for those it serves until the end of the holiday period. JPMorgan Chase, Citibank, and Wells Fargo have yet to release a statement on the matter.
Fannie Mae will be suspending evictions on foreclosed homes from December 19th to January 2nd. Freddie Mac will be suspending evictions on foreclosed homes from December 17th to January 2nd. Homeowners affected by Hurricane Sandy will continue to receive suspensions on their homes until February 1st for those with Fannie Mae mortgages and through February 28th for those with mortgages from Freddie Mac.
The US was hit hard from economic downfall four years ago and since then, more than 3.5 million homes have been foreclosed on while 10.8 million borrowers currently owe more than their properties are worth. Fortunately, we have begun to enter housing recovery and as CoreLogic recently found, foreclosures for the month of October were down 17 percent from the same time a year ago.
Fannie Mae Executive Vice President of the Credit Management Division Terry Edwards stated in conjunction with the news, “We’re taking the step in support of families who have faced financial challenges and gone through a foreclosure.”
Edwards continued, “The holidays are a chance to be with loved ones and we want to relieve some stress at this time of the year. We encourage homeowners having difficulty to reach out for help as soon as possible.” Homeowners in need can find assistance at mortgage help centers, hotlines, and websites for information on foreclosure alternatives.