San Diego real estate blog - Peter Toner

Just “in time for the holidays”… Fannie Mae and Freddie Mac serviced loans on the verge of foreclosures or evictions will be suspended starting November 26^th, 2008 through January 9^th, 2009. The six week halt is to allow the servicers additional time to create more efficient loan modification programs for their troubled borrowers. Currently there is not a modification program that servicers are following across the board. They hope to create such a program that can be implemented for homeowners who have the want and ability to stay out of foreclosure with the help of a “work out.”

To ensure homeowners can actually afford their loan payments servicers will “work out” their loan so that the payments do not exceed 38% of the homeowner’s monthly pretax income. Both Freddie Mac and Fannie Mae will contact all homeowners who were scheduled for foreclosure sales during the days that the 6 week halt is to occur. There will be no evictions allowed for properties that are occupied. If your property is vacant the halt will not be applied to the home and the foreclosure sale will continue as normal. It is estimated that over 16,000 homeowners will be affected by the halt and contacted by either Fannie Mae or Freddie Mac servicers.