Fannie, Freddie suspend foreclosures for most at-risk

11.21.08
By Timothy Jones

Approximately 16,000 homeowners who are in danger of foreclosure - or who have upcoming evictions scheduled - will receive a period of respite from Fannie Mae and Freddy Mac.

On Thursday, the mortgage giants announced that they will be suspending foreclosures between November 26 and January 9, in the hope that the move will give their recently announced mortgage modification program a chance to begin working.

Recently, Fannie and Freddie introduced the mortgage plan, aimed at the worst-hit households in the current crisis.

To qualify, you need to be at least 90 days late with home loan payments, live in the mortgaged home and prove that you are suffering hardship.

Under the plan, loan payments can be adjusted so that they equal no more than 38 percent of the household's total gross income. However, the overall amount that the borrower needs to be pay is not reduced.

If you are teetering on the brink of losing your house but don't have a Fannie or Freddie home loan, you may still be in luck. Some other major lenders - such as Bank of America, Citigroup and JP Morgan Chase - have also introduced mortgage modification programs of their own.

And if you are not quite at the point of foreclosure but are still struggling to meet mortgage loan payments, it is never too early to devise a budget that can help you devote more of your income towards paying off your home loan.

Figures from RealtyTrac reveal that foreclosures are continuing to rise across the U.S., with filings rising 5 percent between September and October. However, if you move swiftly and effectively, you may avoid adding your name to the growing list of those who are losing their home.

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Around 16,000 people will have their foreclosures delayed