Struggling homeowners get an early treat.
Last Fall, almost 2 million houses were on the verge of foreclosure. This holiday season, homeowners who are underwater are getting a less difficult winter break than what they were expecting. Fannie Mae, Freddie Mac and Citigroup are all suspending foreclosures that is, for a limited time only
The two government-controlled companies started delaying foreclosures and evictions last December 18 and will run until January 3 next year. The Associated Press reports, “They have immediately suspended all foreclosure sales involving occupied single-family and 2-4 unit properties through March 6, to give troubled borrowers more time to work with loan servicers to avoid losing their homes. The move, which doesn’t apply to vacant properties in foreclosure, is ahead of the Obama administration’s roll-out of its national foreclosure prevention and loan modification program.”
On the other hand, Citigroup began suspending foreclosures a day earlier and will last longer, until January 17. The Associated Press states in a separate report, “The suspension means Citi will halt foreclosure sales and stop evicting homeowners from properties it has already seized. The company projects it will help 2,000 homeowners with scheduled foreclosure sales and another 2,000 that were due to receive foreclosure notices… Citi has enrolled about 100,000 borrowers in the Obama program, but had made only about 270 of those modifications permanent as of the end of last month, according to a Treasury Department report. But Das said the low number resulted from a “reporting error” and said it will rise dramatically by year-end.”
Next year, many homeowners may still be forced out of their homes when mortgage modifications fail to cover 4 million of them. The more dire consequence is that there are no foreclosure suspension announcements in lieu of other occasions. Anybody heard of banks postponing foreclosures because of Valentines or Easter? Absolutely not.
We need to get those loan modifications fast since moratoriums are clearly, temporary quick fixes.