Foreclosures and Evictions Stop by Fannie and Freddie
Religious leaders and community activists and others gathered in Washington D.C. to meet with Federal officials, Congress and members of the Barack Obama transition team for a solution, such as more loan modifications and the like, to slow down the ever-growing foreclosure crisis that is affecting millions of homeowners. The religious leaders and prayerful were also there in Washington, D.C. to pray for some relief to homeowners facing foreclosure and eviction. Their prayers may have been answered, somewhat.
Fannie Mae and Freddie Mac, two of the largest home loan lenders in the U.S., have agreed to stop foreclosure and evictions for about six weeks beginning Nov 26, 2008 through January 9, 2009, just in time for the holidays. The suspension of foreclosures
According to Fannie Chief Executive Officer Herb Allison,
we felt it was in the best interest of both borrowers and Fannie Mae to take this extra step to ensure that homeowners with the desire and ability to prevent foreclosure have an opportunity to stay in their homes.
Fannie and Freddie who holds over $5.2 trillion of the $12 trillion U.S. home mortgage market, have partnered with HOPE NOW, a coalition put together by the government, consisting of the largest U.S. mortgage servicing companies. HOPE Now offers homeowners who are at least 90 days delinquent and have high loan-to-income ratios the chance to modify mortgage terms in order to reduce their monthly mortgage payments.
Fannie and Freddie’s basic plan is to reduce interest rates for up to five years and lengthen repayment terms to as much as 40 years to trim monthly payments to roughly 38 percent of a homeowner’s monthly pretax salary. In some cases, borrowers may qualify to temporarily reduce the principal amount of the loan, which would be due without interest if the house is sold or refinanced.
Since Fannie and Freddie are under government supervision since September 6, 2008, their efforts to help struggling homeowners may continue to expand to be able to help all homeowners having financial setbacks in this turbulent, recession economy. Since they hold a large stake of the home mortgage market, this plan may be able to help many more homeowners than plans offering help by other lenders and institutions.
Homeowners who are currently facing foreclosure and eviction whose loan is held by Fannie Mae or Freddie Mac, can breathe a little bit now, go ahead and exhale! Do not give up your attempt to save your home under any circumstances. Come back soon, as we explore steps to take during this “foreclosure time-out!”
No comments yet.