Hope you're enjoying your Sunday afternoon folks! Our Chicago Bears aren't doing so well these days, so I'm taking some time off from the Bear-St.Louis Rams game to hit the blogging trail!
By now, you've heard of plans by U.S. Mortgage Guarantors and Investors Fannie Mae and Freddie Mac to modify thousands of its loans held by borrowers at least three months in arrears, who still have the ability to make their house payments with a modified loan at 38% of their household income.
While they are putting the finishing touches on this program, they have decided to stay foreclosure sales and resulting evictions through January 9th of next year. No foreclosures for the holiday season!
The companies announced Thursday plans to suspend foreclosure sales of many owner-occupied single-family and two-to-four-family apartment buildings between November 26th, 2008 and January 9th, 2009.
Although Fannie Mae and Freddie Mac hold a fairly small percentage of all mortgages held by home borrowers in distress, they hope their example will be adopted by other lenders and mortgage-servicing firms.
Until recently, the long-held position of the mortgage lending industry involved handling delinquent home borrowers one at a time. This is a costly and time-consuming process, both for the lenders and the borrowing consumers, as average home prices have continued to tumble in many areas across the U.S., and foreclosures have skyrocketed.
The costs for lenders to take back foreclosed homes, and later sell them at a steep discount, continues to climb quickly. Hence, their desire to address the problem on a more streamlined, far faster basis.
Freddie Mac presently holds 28,089 foreclosed properties, as of the end of the Third Quarter, 2008. That's nearly a 136% jump from 11,916 at the end of the Third Quarter, 2007. Sales proceeds from the sale of these foreclosed homes averaged 29% less than the loan balance due. The same deficit was 14% one year ago.
Fannie Mae held an inventory of 67,519 single-family foreclosed homes on September 30th - up from 54,173 at the end of the Second Quarter of this year, and 33,729 at the end of 2007. The net sales prices for Fannie's foreclosed home sales fell to an average of 30% of the outstanding loan balance, from 22% less one year ago.
For more, please read our post today via BlogChicagoHomes.com, with a link to Friday's article in the Wall Street Journal by Aparajita Saha-Bubna.
DEAN & DEAN'S TEAM CHICAGO
I think its a brilliant idea, what a great Christmas present for many homeowners.
Hi Dean... I think that this is great news and I do sincerely hope that others follow their lead on this plan. Happy Holidays from Aunt Fannie and Uncle Freddie!