Freddie Mac stops foreclosure sales of occupied homes until Jan. 9

Freddie Mac announced Nov. 20 that it ordered its national network of mortgage servicers and foreclosure attorneys to suspend all foreclosure sales and evictions involving occupied single-family and two- to four-unit properties with Freddie Mac-owned mortgages through Jan.9.

The suspension will help servicers implement the streamlined modification program recently announced by Freddie Mac, Fannie Mae, the Federal Housing Finance Agency, HOPE Now and 27 mortgage servicers. The temporary suspension also is expected to give servicers more time to help borrowers avoid foreclosure.

According to a news release, Freddie Mac servicers and foreclosure attorneys were told to contact an estimated 6,000 borrowers with foreclosure sales scheduled between Nov. 26 and Jan. 9 as quickly as possible.

If the property is occupied, the servicers and foreclosure attorneys will halt the sales, and no evictions will be completed between those dates, the company said.

The temporary suspension of foreclosure sales, however, does not apply to vacant single-family properties.

"By working closely with FHFA and our servicers, Freddie Mac is on track to help three out of every five troubled borrowers with Freddie Mac-owned loans avoid foreclosure this year," said Freddie Mac Chief Executive Officer David M. Moffett in the release. "(This) announcement builds on this momentum and provides a new measure of certainty to many of these families during the holidays."

Moffett said that by delaying these foreclosure sales, the nation's servicers will have the opportunity to work with more borrowers who could qualify for modifications under the streamlined modification program scheduled to begin by Dec. 15.

Moffett also emphasized that lenders servicing Freddie Mac-owned mortgages will continue to work with borrowers to consider all workout options Freddie Mac employs to help distressed borrowers who can and want to stay in their homes, such as permanent rate reductions and mortgage term extension modifications.

This year, Freddie Mac expects to approve 84,000 workouts for the estimated 140,000 homebuyers who are delinquent on Freddie Mac-owned mortgages.

Other recent initiatives by Freddie Mac to help troubled borrowers have included delegating expanded workout authority to servicers, doubling the amount of money servicers are paid for successful workouts, and paying nonprofit organizations to reach out to worried borrowers.[[In-content Ad]]