WASHINGTON – Freddie Mac and Fannie Mae have suspended foreclosures until Jan. 9, 2009. The GSEs said the suspension will give servicers time to implement the mass modification program announced last week by Fannie, Freddie and FHFA.
Freddie Mac servicers and foreclosure attorneys were told to quickly contact an estimated 6,000 borrowers with foreclosure sales scheduled between Nov. 26, 2008 and Jan. 9, 2009. Fannie said it will be reaching out to more than 10,000 borrowers.
If the property is occupied, the servicers and foreclosure attorneys will halt the sale. The temporary suspension of foreclosure sales does not apply to vacant single family properties.
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No evictions will be completed between November 26 and January 9.
The streamlined modification program is scheduled to begin by Dec. 15. Borrowers must be three months behind on their loans to qualify. The interest rate or principal amount of the loan would be reduced so that borrowers would not pay more than 38% of their income on housing expenses.
The GSEs control more than 58% of the mortgage loans in the U.S. One percent of the loans backed by Fannie and Freddie are 90 days or more past due.
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