Fannie, Freddie Suspend Foreclosures

Carrie Bay | 11.20.08

Fannie Mae and Freddie Mac announced this afternoon that they are suspending all foreclosures on mortgages that the two companies own.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.

DSNews.Com Default Servicing In Print and Online - Formerly REO Magazine

It is obvious that the focus is to stop the bleeding - the banks have finally realized that foreclosure is not the solution they thought it was and it is better to modify the terms of the loan than to become asset managers.  The cost of foreclosure to the industry is staggering from the process itself, to securing the property after auction, and marketing to the shrinking pool of prospective home purchasers.  The problem is, however, that the distressed homeowner still has to prove they can afford the reduced payment.  If you can't document your income, loan modification is not going to be a solution.

The ghost towns in the south and west should be a lesson to those that believe homeownership is for everyone and that lawyers are not a necessary part of a real estate transaction.  I ask who was there to explain the terms of that option ARM with negative amortization to the borrower? A mobile notary????? Shame on all of you who told these borrowers you don't need a lawyer!!! 

Blogged with the Flock Browser

Tags: realestate, mortgage, subprime, loan modification, Fannie Mae, Freddie Mac, foreclosure, auction, short sale