Fannie Mae Suspends Foreclosure Evictions in Time for the Holidays
Fannie Mae Suspends Foreclosure Evictions in Time for the Holidays
The Federal National Mortgage Association or Fannie Mae has formally announced the temporary suspension of all its foreclosure evictions for two weeks. The government-sponsored secondary mortgage servicer said it would implement a ban in evicting families from foreclosed homes from December 20 until January 3 of the coming New Year.
The mortgage company observes a tradition of halting foreclosure processes every year during the Christmas holiday season. Fannie Mae formally made its announcement for the holiday foreclosure suspension a week after the Federal Home Loan Mortgage Corporation or Freddie Mac disclosed its own plan to do the same.
Fannie Mae presently holds a delinquency rate of about 4.56% of its mortgage portfolio. As of October this year, the company has a combined loan amount of $798 billion. It is actively buying mortgages from banks to make sure those lenders would have replenished resources to provide more loans to more needy borrowers. In turn, Fannie Mae securitizes the mortgages it buys as mortgage-backed securities.
In an emailed statement to media, Fannie Mae said the temporary foreclosure halt is in line with its practice in the past years of not evicting families from their homes during the season. Several private lenders also make similar temporary bans to give way to the holiday celebrations.
Fannie Mae and Freddie Mac have recently ordered their property agents to resume selling foreclosed homes. The two companies, along with most mortgage lenders, decided to temporary freeze their foreclosure activities after a foreclosure documentation scandal erupted in September.
Numerous homeowners and mortgage borrowers have complained that some lenders illegally evicted them from their homes. Investigations launched by regulators and state attorneys general have found that most lenders use robo-signers' when handling foreclosure documents.
In a robo-signing scheme, thousands of foreclosure papers are signed in a day without any legal review. The documents make foreclosures effective immediately.' In other cases, dual tracking' was committed. In the process, a lender implements and finalizes a foreclosure even if the law states that a borrower should be given opportunities and time to negotiate terms to avoid foreclosure.
The issue prompted the Senate Banking Committee to conduct a series of hearing about the problem. Regulators, state attorneys general, and bank representatives were summoned for the hearing. Fannie Mae and Freddie Mac were also invited to provide their testimonies.
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