I just read an article released yesterday that Fannie Mae will suspend foreclosures until January 2009 while the streamlined modification program is implemented.
The streamlined modification program was announced November 11, 2008. The program is targeting those high risk borrowers who have missed at least 3 payments and own and occupy the subject property. The streamlined program is a method to help troubled borrowers into a lower interest rate, extend the life of the loan and in some cases even defer payments. Each lender will have flexibility within the program but the bottom line idea is to help borrowers at risk of foreclosure get into a lower, more affordable payment.
The current and temporary suspension of foreclosures is hoped to help borrowers stay in their home while Fannie Mae works hand in hand with servicers to implement the new program which is due to launch December 15. During the suspension time period servicers are instructed to reach out to these borrowers and attempt plans to keep them in their homes with payment options.
It appears borrowers who have Fannie Mae loans that are set to foreclose between November 26, 2008 and January 9, 2009 will be contacted directly by the attorney heading the foreclosure. Vacant homes may be handled differently but if the home is occupied, Fannie Mae has instructed servicers to suspend the foreclosure.
This is not only a good sign for those facing foreclosure but for the housing economy as a whole. The next step is to see if other servicers to follow and arrange a program of their own to help home owners who wish to stay in their home do so, in the end it’s a win-win for everybody.
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