Freddie Mac halts foreclosures on customer homes
San Antonio Business Journal
Freddie Mac has instructed its national network of mortgage servicers and foreclosure attorneys to stop all planned foreclosure sales and evictions involving Freddie Mac-owned mortgages during the holiday season.
The move is designed to give more homeowners facing foreclosure or eviction additional time to take advantage of the newly announced streamlined mortgage modification program, says Freddie Mac CEO David M. Moffett.
This should allow homeowners to work out agreements with mortgage services to avoid foreclosure. All foreclosure sales slated from Nov. 26, 2008, to Jan. 9, 2009, will be temporarily stopped. The program applies to single-family and 2-4 unit properties.
Earlier this month, Freddie Mac, the U.S. Department of Treasury, the U.S. Department of Housing and Urban Development, the Federal Housing Finance Agency, Fannie Mae and the HOPE NOW Alliance announced a streamlined mortgage modification program they say should help three out of five troubled borrowers avoid foreclosure this year. The program is open to Freddie Mac customers.
Freddie Mac officials say the program will begin on Dec. 15. Troubled homeowners may qualify for an adjustment in their monthly mortgage payment that would make it more affordable than their current note. Mortgage servicers will be able to adjust the monthly payment by setting payments to a benchmark ratio of a family’s monthly gross household income.
The program gives mortgage servicers the ability to switch a customer from an adjustable rate mortgage to a fixed-rate mortgage. Freddie Mac servicers will also have the power to adjust the interest rate, amortization term and maturity date and/or unpaid principal balance to lower the monthly payment.
Freddie Mac servicers and foreclosure attorneys were directed to contact some 6,000 borrowers nationwide who are facing foreclosure sales scheduled between Nov. 26 and Jan. 9. If the property is still occupied, the sale will be halted. However, if the property is vacant the sale will proceed. In addition, no Freddie Mac customers will face eviction during this period.
Congress established Freddie Mac in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Over the years, McLean, Va.-based Freddie Mac (NYSE: FRE) has helped one in six homebuyers get into a home.
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