Fannie Mae Halt on Foreclosures

HOMEOWNERS TO KEEP THEIR HOMES THROUGH THE HOLIDAYS.

Fannie Mae to Temporarily Halt Foreclosure Sales and Evictions

through January 9, 2009.

If you are behind on your mortgage payments and avoiding your lender, stop and open your mail. On November 11, 2008 The Federal Housing Finance Agency , Freddie Mac and Fannie Mae announced a streamlined modification program for homeowners in default who are facing foreclosure.  These agencies are committed to assisting homeowners in default of their current home mortgages to retain their homes in lieu of foreclosure by the current lender. Since these agencies guarantee the loans held by many of Americas Mortgage Lenders, they have the authority to insure these mandates are applied by the mortgage servicers, Banks servicing Fannie Mae backed loans include Bank of America, Chase, Citimortgage, Countrywide, and many more. For a full list of Fannie Mae lenders got to www.Fanniemae.com.  As part of the agreement the agencies have requested that these lenders work out loan modifications allowing for homeowners to have their current mortgages modified. Each loan is as unique as the individual borrowers situations who have defaulted on these loans. In general the modifications allow for borrowers to have the interest rate reduced, thus lowering their monthly payments. Rates are adjusted to 30-40 year fixed rate mortgages removing the adjustable rates that required future increased payments from borrowers. In some cases principle balances are being reduced, but most commonly the current loan terms are extended out in time with the defaulted amount being added to the back end of the loan. Payments may be extended by 10-20 additional years to their current mortgage. Under the modification terms, loans are brought current and homeowners are given 30-60 days without a payment due before the new modification terms begin. In some cases a payment equal to one months mortgage payment to the lender is required to approve the modification. By bringing the homeowner current and allowing them a short time period with no payment due and reducing the interest rate and monthly payment s, the homeowner is allowed time to get financially back on their feet and stay in their homes. With a new lower fixed rate payment most borrowers will be able to keep their homes.

 These streamlined modifications are set to begin on December 15, 2008. Non Freddie Mac and Fannie Mae Lenders also have plans to engage in similar programs on their own starting in December of 2008. If you have missed your mortgage payments or know you are about to, contact your lender immediately to discuss a modification of your loan in order to save your home. Start by checking your lenders website to see what they are currently offering and or call 1-888-995 Hope, which is a National Foreclosure Helpline that may answer additional questions to your specific needs. You can also do this online at www.995hope.org.

Lenders have recognized that many homeowners are in this situation due to the current market. Because home values have decreased across the nation many homeowners who have or had adjustable rate mortgages are not able to refinance their loans to avoid the adjustable rate increase, regardless of their credit ratings. This has forced many homeowners to make difficult decisions on what to do to save their home. The market situation will adjust in time and home values will return as the market stabilizes and consumer confidence returns. The most important thing to remember is if you are in this situation do not ignore it and do not walk away from your home, call your lender and or the Foreclosure Hotline for help now before it is too late.

In addition. On November 11, 2008, Fannie Mae began instituting a halt to all foreclosure sales on occupied single-family properties. This includes a halt on the completion of evictions from occupied single family homes scheduled to occur from November 26, 2008 through January 9, 2009. This began with a letter which was sent out on November 20, 2008 to all Fannie Mae single-family servicers issuing a temporary halt to foreclosures and evictions. The Foreclosure halt will apply to mortgages owned or guaranteed by Fannie Mae and to foreclosures of homes that are already in process with foreclosure sale dates scheduled during the halt period. Servicers and Foreclosure Attorneys (or trustees) must institute the halt on foreclosures for eligible homeowners no Later than November 26, 2008. The temporary foreclosure halt applies to occupied single-family homes which either have or will have a foreclosure sale date scheduled to begin on or after November 26, 2008 and Through January 9, 2009. If the property is unoccupied the lender is allowed to proceed with the foreclosure process. If the lender is unable to determine occupancy on a home, then the lender must assume that the property is occupied and temporarily halt the foreclosure process. During this time period Lenders are expected to continue working with borrowers to resolve the delinquency using Fannie Mae’s available foreclosure prevention options.  Lenders must instruct foreclosure attorneys and trustees to send a letter to each impacted borrower urging the borrower to contact his or her servicer in order to communicate and work on modification solutions in lieu of foreclosure.

Fannie Mae is also implementing a temporary halt on the completion of eviction lockouts

of occupied homes beginning November 26, 2008 and ending on January 9, 2009. Fannie Mae will continue to initiate the eviction process on properties they have previously foreclosed on, but these actions will not result in lockouts being scheduled on occupied single-family homes during the halt period.

Lenders will continue to report the delinquencies by borrowers to credit reporting agencies as they have in the past, however under this program they will also maintain a schedule of all foreclosure sales affected by the halt. The lenders will provide these reports to Fannie Mae and Freddie Mac for each month from November of 2008, to January of 2009.

For more information on this subject go to http://www.fanniemae.com